Retirement
Maximising your super savings in the years before retirement
Approaching retirement can be stressful, especially for Australians who do not have enough money in their super to retire on, but taking action in the five to ten years before retirement can still have a huge impact.

Maximising your super savings in the years before retirement
Approaching retirement can be stressful, especially for Australians who do not have enough money in their super to retire on, but taking action in the five to ten years before retirement can still have a huge impact.

Pre-retirees often need to juggle the different components of their lifestyle and this can be difficult for those who feel they haven’t saved enough money to retire, according to HLB Mann Judd manager Lindzi Caputo.
“Often, people just aren’t sure of what they need to be doing,” Ms Caputo told Nest Egg.
“Some people also haven’t thought about their retirement, and they’re getting to five or ten years out from it and going, ‘Well, hold on, what should I be doing now that it’s getting closer?’”
Ms Caputo said is not too late for most people to make changes and start to build or boost their nest egg.
“Pre-retirees might need to reassess what they can do with their savings. It might be that they need to change their expectations,” she said.
“It might be just realising that, in fact, they have to stay in the workforce a little bit longer to bolster up those savings and get them into a position that they want to be in. It might be that they need to become more comfortable with taking less out of their investment wealth to provide for themselves going forward.”
Pre-retirees who want to improve their position should pay off their debts as a starting point, Ms Caputo advised.
“Make sure that credit card and personal loan debts are extinguished first. That’s really the first port of call, and then of course paying down the mortgage as quickly as possible,” she said.
“The next step is to think about where you should be putting wealth.”
Ms Caputo said any additional cash should be invested in superannuation and salary sacrificing is an effective way to do this.
“If someone was earning $80,000 a year and chose to salary sacrifice $10,000 a year to super, that would reduce their take-home pay by $6,550 a year, so there’s an impact there,” she said.
“But they’re ending up investing more than what their take-home pay is reduced by and it would lead to an overall tax saving of $1,950 a year.”
Finding the right investment strategy is also critical, though pre-retirees will need to be realistic here when forecasting what they can live off and how much they are likely to generate in returns, Ms Caputo said.
In some cases, investors may need to take on additional risk to achieve the kinds of returns they’re looking for, Ms Caputo said, adding that seeking advice is the most effective way to find the right balance between returns and risk.
Additionally, online resources such as those available through the government’s MoneySmart website can help to forecast expected returns for certain portfolio mixtures.

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