By the time you\u2019re in your 40s you\u2019ll potentially be earning more money than you may have previously \u2013 but you may also have unexpected or unwelcome expenses, like divorce. At this age you might also put retirement planning on the backburner in favour of more pressing financial commitments, such as your home loan and kids\u2019 school fees. Use these potential life changes as the impetus to re-evaluate your assets and income and look at how you can maximise savings for your retirement.<\/p>\n\n\n\n
Keep tabs on how much you\u2019re likely to need in retirement<\/a> by checking the retirement standards<\/a> published quarterly by the Association of Superannuation Funds of Australia (ASFA). Calculate this against your own super balance to give you an idea of how soon you\u2019ll be able to say goodbye to the 9 to 5.<\/p>\n\n\n\n Set realistic financial goals<\/strong><\/p>\n\n\n\n While your financial goals in your 20s and 30s may have been idealistic, as you get closer to retirement, they should become realistic. It\u2019s time to develop a clear plan for your savings, with achievable short, mid and long-term targets working toward your overall retirement goal.<\/p>\n\n\n\n Live within your means<\/strong><\/p>\n\n\n\n Your 40s are typically peak earning years. It\u2019s important to consider funnelling some of this cash into actively saving for your retirement.<\/p>\n\n\n\n Become more mindful around spending on big-ticket items as well \u2013 before a splurge, try taking a day (or a week) to give yourself time to think about how much you really need the item. You\u2019ll be surprised at how often you decide it\u2019s not essential to your life, and the money you save can be added to your retirement savings instead.<\/p>\n\n\n\n Review your investments<\/strong><\/p>\n\n\n\n Your super might be ticking along, but what about other investments? It\u2019s not too late to start saving and investing. Work out what style of investor you are so you have a better understanding of how comfortable you are with risk. Then talk to a financial adviser about creating a portfolio that suits you, which might include property, shares and other investment classes.<\/p>\n\n\n\n Aim to be debt free<\/strong><\/p>\n\n\n\n Entering retirement with debt means juggling repayments with a high interest rate, which will eat into your retirement income.<\/p>\n\n\n\n To enter retirement debt free, look at paying off your home loan before you retire. Preparing for retirement in your 40s might mean getting a better deal on interest rates or creating a budget that allows you to make extra contributions to your home loan, above your minimum monthly repayments.<\/p>\n\n\n\n Make sure you pay off your credit card balance in full each month so you don\u2019t accumulate interest. Be cautious about borrowing money that you won\u2019t be able to pay off in a short period of time.<\/p>\n\n\n\n TIP 1: Not all debts are the same. It\u2019s a good idea to understand which are \u2018good\u2019 and which are \u2018bad\u2019, and which you should be paying off first.<\/p>\n\n\n\n
Calculate how much you\u2019ll need for retirement<\/strong><\/p>\n\n\n\n