A popular question often posed of celebrities is what they would share as ‘advice to their younger selves’. The answers can make fascinating reading, with a strong thread of ‘never give up’ ‘believe in yourself’ and ‘honour your dreams’ usually featuring.
Today we pose a similar question to you, but it’s not about your career or achievements. Rather, it’s about the way you have approached saving for your retirement.
This, of course, can be a minefield. You might be inclined to view this question as a judgement on how financially ‘successful’ you have been, particularly in your own eyes.
But this is not the point at all. Most older Australians are painfully aware that it is often not their own actions, rather the parents they ‘chose’, the level of education they were able to access and a myriad of other factors that combine to create a life course, either advantage or not.
Some people get a head start
Some people have a seemingly blessed start, with wealthy family, and then appear to take off from there, enjoying tertiary education, well paid work and solid wealth.
Others seem to have a less than ideal start and struggle to rise above the need to simply cover household costs, let alone acquire property or invest.
Still others may rise above a disadvantaged start – or hit financial turbulence because of poor health, family estrangement and many other reasons.
And then, in between the extremes, lie the vast bulk of Australian retirees who have done their best with what they were given, yet still believe that they need more to fund a reasonable retirement.
So today we are trying to learn more about the way that you saved for retirement and if you had your time over, what you might change.
We’re asking this question in the March 2023 Retirement Pulse and we will share the results in early April, as they can offer great insights for all retirees who often question whether they could have done something differently. Or whether they still might?
Please take the five minutes needed to respond to our survey and we will look forward to analysing and resharing the results week beginning 3 April.
Advice to younger self is
Divest of all non home assets so that we get down to the level of the assets where we are entitled to full pension. Give excess to the kids, before retirement bearing in mind the centrelink rules on this. Or at any time by upgrading to for example a $2 million house. To get the equivalent to the full aged pension. Almost $1.5 million in capital assets is required to generate equivalent to aged pension. That is safely.
Self funded retirees are being victimised.
Agree
All superannuation should be tax free to enable more to be self funded and less burden on the government. I believe this was Keatings plan.
Superannuation in general is not keeping pace with inflation atm
Don’t put all your eggs in one basket. Super is okay. I have only had employer contributions in super and used my extra money to buy investment properties, rather than like my brother-in-law who put all his spare money in super and by the time he retired, they had lost half his savings, whereas property appreciates over time, which you can then sell once retired (reducing CGT), add a lump sum to one’s super and fund your retirement in relative comfort. Super in recent times have had 2 loss cycles, losing over $80,000 from my super savings, whereas my properties despite the downturn have still doubled, almost tripled in value. Use other investments to top up one’s retirement funding.
Advice to younger self.
Be ready when you finally retire for the Government to stuff it all up for you. It will take you many years of hard work, long days, raising kids etc to accumulate money so that you can have a good retirement. You will think that it is all going to be great. You will think that you will spend heaps of time making memories with your wife of many years but alias you will not be able to as your wife will be younger than you and she will have to keep working until she turns 67. In the meantime your money just bleeds out of your super. You will not be entitled to any government assistance. You will just have to suck it up for 4 years and then hope your health stays good so you can make those memories.
So to younger self, be fully aware that the Government will continue to stuff up your life whether you are 21 or 68 years old.
Keep buying quality Real Estate in the right area.The larger the better.Establish a big grannyflat or 1st floor separate living. The rental return on these type of quality builds in Sydneys lower North Shore is approx $800/week. Its serves 3 purposes.1) your children can rent. 2) Enables buyers to buy and share accomodation expenses with in-laws and share costs with built in Baby sitters. 3) Allows you to invite paying guests to keep you company down the track as it is your home.
To younger self.
Plan retirement without Government support(pension).
Invest on super , property,shares.
Don’t give your money away(kids,etc) in order to get the pension.
While $40K pension for 2 seems fine in a way, often in the unfortunate event of a divorce or one passing away $25K is impossible to get by.
You worked all your life and then forced to get a job when you old is a very sad affair.