Women in their 40s and 50s may feel as if it is too late to start saving for retirement. It can be hard to start saving later in life, but this doesn’t mean that it is impossible.
There are simple steps individuals can take in order to sure up the odds of living well later in life – it just takes a little elbow grease.
Taking the time to go through your finances and calculate how much of your current income things like grocery bills and clothes actually cost is a great starting place.
This will help you work out a ballpark figure for retirement based on your current consumer habits.
It can also act as a wake up call if you find that there is a considerable gap between your current earning capacity and household expenses. And while this task can seem daunting – it is rare to find people who enjoy paperwork – just remember that taking the time to get on top of your finances now will save you money further down the track.
A financial advisor can help you plan ahead, but if this seems exorbitant there are also a number of free online calculators that make it easier to put a dollar value on the cost of retirement.
Once you have a fair idea about how much money you are likely to spend in your golden years, you can start researching different ways to cover these costs.
The number of self-funded retirees in Australia is continuing to grow and many workplaces offer long term employees generous retirement packages.
Compulsory superannuation payments also help to ease the transition to retirement and act as a buffer against financial hardship.
If this is the case, then it may be time to look for alternative sources of income such as government or spouse pensions.
Downsizing or moving abroad to retire – many Australians seek out properties in countries where the cost of living is lower – may also be worth considering.
Federal government reports show that as many as 75,000 Australians receive pension payments while living abroad, with many migrants choosing to return to their country of origin after exiting the workforce.
The trend also extends to Anglo-Australians who are increasingly moving to South-East Asia in order to increase the buying power of their pension – a trend that is already common throughout the UK where residents often move to countries like Spain, Italy and Greece.
Couples whose children have moved out of home may find that they are paying ongoing running costs such as electricity, gas and water bills for spaces that are rarely used.
Rather than continuing to cover these costs moving to a smaller house, flat or property may be a more attractive option.
The added advantage of downsizing is that you can often cut back on the amount of time it takes to clean or maintain your property – which is time that can be better spent on the golf course.
Taking on part-time work can also help low-income earners get ahead and ensure that they are not lacking funds in the later stages of retirement. However, if you have been out of the workforce for a considerable length of time chances are that you may not have a lot put away in your super fund.
Women who have spent a long time in high-profile positions may find that they are more interested in learning about different ways to grow their wealth.
Investing your retirement funds in carefully researched stocks and mutual funds can help to maximise your earning potential and make sure you retire comfortably – just ensure to regularly follow market changes in order to better manage these funds.
ipac is one of Australia’s largest financial advisory firms and has offices based across the country. A wholly-owned subsidiary of the AMP Group, ipac specialises in research and financial advice that helps clients lead happier, more fulfilling lives.