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Here’s how to plan for retirement at any age

Photo: Matt Cardy/Getty Images

Australia’s superannuation system is one of the largest in the world, with approximately $2 trillion in assets. However, research shows that a majority of Australians are still significantly unprepared for retirement.

Although the average Australian expects to spend approximately 23 years in retirement, their money will run out after only 10 years, leaving them to live off a meagre pension for the rest of their years.

Zaki Ameer. Photo: Supplied

So, why are Australians so unprepared for retirement?

Unfortunately many people believe that their standard superannuation contributions will be enough to live off when they reach retirement age. Sadly however, this isn’t the case at all. In today’s market investing is almost essential to ensure a person is financially supported throughout their retirement. Without investment assets, the average couple’s super balance at retirement is over $200,000 short of what they need to live on comfortably[3].

The good news though?

Although investing and making regular contributions to one’s superannuation fund is recommended from as early as possible, ideally during one’s 20’s, if this hasn’t occurred it is still possible to catch-up. No matter how unprepared a person has been during their younger years, financially preparing for retirement is achievable at any age, even as late as 50s.

To help ensure you are prepared for retirement, no matter what age you are, here’s some expert advice:

Eliminate consumer debt first

Credit card debt isn’t cost effective, therefore paying off your highest interest balances first and using the money freed up as each card gets paid off to accelerate the payoff of the remaining cards means you’ll be debt-free much quicker.

Knowing that one investment is not enough to retire on, and the earlier you start the better

Focusing on property investing as an example, to retire on a $100,000 per annum passive income, you would need 10 properties each with a purchase price of $300,000, receiving $350 per week per property for a minimum of 10 years before you achieved this level of financial stability.

Capitalise on what you could be earning money from

Is there an extra space in your house or office that you could rent out for extra cash? Assessing any small changes that could mean significant profit are an effective way to improve your bank balance quickly.

Invest your pay-rise

Many people increase expenses every time their income rises, but smart investors control their spending by putting all of their raises and bonuses directly in an account that will earn a higher level of interest.

Ensure your insurance is in place as a form of financial protection

Financial protection is essential when it comes to investing. Speaking to a financial advisor to set up income, disability, life and trauma insurance is the only way to safeguard yourself, your portfolio and your retirement fund.

Although many people are intimidated by the thought of preparing for retirement, it’s important to ensure quality of life in one’s later years. Following these steps, or enlisting the help of experts when in doubt, will make preparation for comfortable retirement as simple as possible.

Zaki Ameer is a property investment expert and founder of Dream Design Property (DDP). DDP is a unique wealth creation mentoring program that is designed to help Australians gain financial freedom, offering each client an ongoing personalised service catering to their changing circumstances and needs. DDP has helped purchase over 1,000 properties for its clients.

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