Are you a millennial? If so, the chances are that you are probably halfway to retirement! Sam Robinson provides information on how to get retirement ready in this article in The Age.
Making the Most of your Millennial Super Savings
While most people don’t think about retirement and their superannuation until later in life, Sam highlights the importance of focusing on your super savings during your working life and your ‘wealth accumulation phase’, particularly as a Millennial. Taking advantage of a longer timeframe and larger appetite to risk can help to maximise your balance and improve your lifestyle when in retirement.
Practical Tips:
1. Checking Your Super Balances:
You should regularly check your super balances when first establishing a super fund or starting with a new employer to ensure the correct contribution frequency and so you can understand the ongoing costs and investment choices available to you. Once comfortable with your contributions, costs, and investment options, check your super balances every 6-12 months, ideally before the end of the financial year.
2. Reviewing Your Contributions:
Check contributions and assess opportunities for additional contributions if within caps (concessional or non-concessional). Review your insurance within super, including the sum insured upon renewal and premiums being charged from your account. If you have existing insurance within a super fund, Sam recommends seeking professional financial advice prior to consolidating funds into one account. She also reiterates the importance of checking the beneficiaries on your super.
3. Important Actions for Millennials:
Sam recommends benchmarking your super against an appropriate retirement goal, aiming for 20-25 times your desired living expenses and being mortgage-free. Use online calculators to project your super balance based on investment style, fees, and contributions. Consider your risk tolerance and opportunities for additional contributions if you are not on track. Seeking financial advice helps you to review your contributions and maximise your investment strategy. For those taking time off work, consider additional contributions or partner (spousal) contributions to avoid falling behind.
4. First Home Super Saver Scheme:
Start considering this option 3-5 years before your intended purchase date to maximise your benefits under the scheme. You should check your eligibility for this scheme. Working with a financial adviser is beneficial to weigh up the appropriateness of this scheme and benefits it can provide.
5. Salary Sacrificing Extra into Super:
Salary sacrificing is a great way to grow your super in a tax-effective manner. You should consider the preservation of these funds and the conditions of release. Know where your funds are invested and be aware of any investment risks that may arise. Be aware of contribution caps for concessional contributions, which increased to $30,000 per annum from 1 July 2024.
Sam has a wealth of knowledge and experience in helping millennials and people of a younger age demographic maximise their retirement situation and ensure there have the correct strategies in place. There is no one-size-fits-all approach to financial advice, and Pursue Wealth is here to support your lifestyle and financial journey.
