When I became a freelancer, I gave little thought to my retirement. I’m still in my twenties, I had ages to think about it. But then the thought struck me, that I was in all likelihood going to be freelancing until the day I retired.
And if I didn’t organise my savings now, when would I? I’m not alone in being concerned about funding a full and happy retirement, and it may be something on a lot of people’s minds come the first stroke of 2012. Here are some thoughts.
Bolster Your Super
For me, I have years left in the workforce to bolster my superannuation. The smartest move I can make is to start making voluntary contributions that are matched by the government. It’s a small amount of money, less than a hundred dollars a month, but with compound interest will hopefully be significant by the time I retire.
If you’re closer to retirement age than that, you may have mixed feelings about superannuation. The incidents of a the past couple of years, with people having to stay in the workforce due to reduced super after the GFC, has left a sense of distrust about the whole process. One does have to wonder how superannuation funds are going to cope with the mass retirement of the Baby Boomer generation.
Irregardless, it’s worth investing your energies in a couple of directions for your retirement. Why not approach your boss about a raise in the form of increased superannuation contributions? It’s certainly also worthwhile discussing the set-up of your super account and how it is being invested with your super fund.
Savings Of Your Own
I’m quite conservative financially, and like having a lot of cards up my sleeve. Personally, I would like to deposit some money into a cash account, especially once I am closer to the retirement age. Approaching it as a extended emergency fund- and with full awareness that it won’t keep up with inflation- I still like the security of having some money stowed safely in a term deposit or bonds.
With compulsory superannuation contributions at 9%, some experts suggest looking at saving an additional 15% to be on track to a well-funded retirement. There are myriad calculators online that can work out exactly how much money you will need to save for your retirement.
If you’re in the retirement zone (as in thinking about it within the next decade), time to put retirement on the front-burner. This will mean a couple of big decision, like where you’re going to live. Will you keep paying off the mortgage in retirement or sell up and move somewhere more affordable. Have you been able to pay off your credit cards? If not, that has to become a major priority as you would preferably be entering retirement with no debt and certainly shouldn’t be going in with consumer debt.
Sit down and work out whether you’re likely to want to stay employed part-time and fit that into your budget.
Now is also the time to review your estate plans and make any necessary changes to your will. For Baby Boomers, there’s a likelihood that people in the retirement zone are still caring for parents and sometimes children. Both of these are big responsibilities, of course. But they have to be balanced- especially with your children- with your retirement savings goals. For starters, an inheritance is a gift not an expectation and you should be perfectly willing to count it all towards a glorious and well-funded retirement.