Firstly, I want you to know you are NEVER too old (or too young!) to be thinking about looking after your future self. My wonderful friend Michelle calls this ‘Futuring’ - Doing things right now that make your future life better. We can do it with simple things like making your bed or cleaning the kitchen, so you don’t wake up to a mess... but I think we need to be futuring for the much further away... like retirement far away.

Women in Australia, on average, earn less, live longer and are more likely to end up in poverty in their later years. Life expectancy for men in Australia is 81.3 years and for women its 85.4 years according to the ABS. So, if you’re 55yrs you still (hopefully) have a long, big life ahead of you!

The Association of Super Funds (ASFA), have created some helpful guides on both how much you need and how much you spend in Retirement. They reckon if you are retiring now a single person who wants a ‘comfortable’ retirement you need about $50k a year and about $70k if you’re in a couple. But I think there is a giant caveat here... what’s your living situation? If you’re renting and likely to rent into retirement, I think you need to plan to have a heap more cash for this. The median rent for both units and houses is $570pw and $594pw in Capital Cities. That in itself is a HUGE proportion of that amount, so please bare this in mind when you are considering your situation and how much you need.

If you’re looking for a place to start, I would be looking at your Emergency Savings. We want that to be easily available (i.e. cash readily available in the bank) and I would always say you should have a minimum of 3 to 6 months available. As you get older, you may want to have more money for health issues...etc.

If your Emergency Savings are sorted and are considering bolstering your Super you can contribute two ways. You can make concessional contributions (either as a Salary Sacrifice or a deductible contribution) or non-concessional contributions. There are different yearly caps and tax considerations here.

Super is the most tax-effective structure we have, remember we have strict rules about how and when you can access your Super so if you are putting money there make sure you are prepared to not have it for a long time. Also, look at how much you are paying in fees (it makes a massive difference!) or if you have more than one Super fund for no particular reason and if you should consider rolling them into one – review your insurance before doing anything here!

On the insurance front...If you got a bucketload of it, because you had a large mortgage or because your kids were little and were financially reliant on you, consider if you still need that much. If not, you may want to consider reducing it and redirecting the savings into your retirement fund.

Note the opposite is also true if you have young kids or a massive debt that your partner could not handle on their own.

An important tip here: Your Super portfolio should be invested correctly according to your age and risk profile...BUT, one of the things I have heard a lot from people over 50yrs is they think it’s time to have all of their funds in conservative assets (to protect them). Obviously, you do you, but many people who are entering this era are happy to have a few years' worth of annual expenses in conversative assets but the rest is more growth-based so it can outperform inflation (cost of living) and continue to grow. Something to think about.

So, well done on Futuring... you can still make a difference to the outcome. You do have options and things you can consider to make sure you have put yourself in the best possible position later in life!  

Have a money dilemma?

Money dilemmas can be a nightmare! They can leave you up all night ruminating about what to do, have you feeling alone and isolated or just plain ol' stuck. So, we are here to help. I am going to tackle one a week and give you my unbiased, no BS general thoughts on how to tackle your conundrum. We would love for you to send yours (or someone you know) in. 

Obvs all of this is general advice only... especially important to note any and all of the comments above do not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs.