superannuation advice, wealth management, retirement planning, SMSF advice

When is the best time to start retirement planning?

For many Australians, planning for retirement is a job for the future. Our younger demographics in particular see the day when they finish work and need to draw on their savings as too far away to worry about.

However, it stands to reason that the sooner you start, the better the outcome. And still, almost half (45.6 per cent) of all Australians aged 25 to 29 consider retirement too distant to plan for, according to Roy Morgan Research.

Almost half of all Australians aged 25 to 29 consider retirement too distant to plan for.

Overall, nearly one-third (30.3 per cent) of our population aged 18 to 64 think this way; and the younger people are, the less troubled they are by the prospect of having only sub-optimal superannuation savings.

The problem is, when people do start taking retirement planning to heart, life can get in the way. A huge 44 per cent of 25- to 29-year olds and 42.8 per cent of those aged 45 to 49 said they are now too busy to do something about their financial futures.

Whatever your age, a small amount of effort now will almost always pay off when you get closer to retirement, and a little wealth management can make a big difference.

So, the time to start planning is now. You can begin by understanding a couple of simple superannuation options – employer-sponsored "default super" and a self-managed super fund (SMSF).

superannuation advice, wealth management, retirement planning, SMSF advice
Become a superannuation super hero – your future self will thank you.

Starting superannuation

Even in a simple superannuation account, you can have a lot of say in your investments. However, according to consumer group CHOICE, 70 per cent of all Australians let their employer choose their super fund.

That's not always the smartest move. These employer sponsored "default accounts", whilst cheaper to set up, can potentially have higher fees and lower level of cost transparency than SMSF, meaning more of that retirement nest egg is going elsewhere. Remember, you decide who invests your money, not your employer.

Taking more control with an SMSF

If you want even more control over your investments, you may prefer to open a self-managed super fund. Whilst the majority of SMSFs invest in cash, property and shares, you have a greater variety of options and more flexibility when you manage your retirement savings yourself.

Despite greater control and investment choice, an SMSF normally requires an opening balance of $200,000 to $250,000 due to the one-off costs in establishing the fund. And whilst an SMSF has a slightly higher administrative burden, the term 'self-managed' is a misnomer given your accountant and adviser can assist in providing the necessary guidance for all administration, compliance, audit, management and investment aspects, leaving you to focus on the things which interest you the most; life, family and holidays!

Where do you start?

Do you need some assistance on choosing a superannuation plan? Get in touch with the wealth management experts at Principal Partners. We can cut through any jargon and help to guide you to a better financial future.

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