18 Feb Why You Need To Think About Your Retirement Now
Many times, I get questions such as, ‘why do I need to think about my super now? After all, I am not going to retire for another 30 years at least!’
Interestingly, this question was what my (future) wife told me on one of our first dates.
I subtly rolled my eyes, not only because I know how incorrect and naive that statement was, but also because I have lost count of the number of times that I heard that statement and of course I know the negative consequences of that mindset.
Now, there is an important thing that people don’t think about when it comes to retirement.
Did you know that ultimately, the building blocks you put into place in your twenties and thirties are going to put you far ahead when you are in your fifties and sixties? Yes, this is correct.
Did you also know that conversely, those who don’t put those building blocks in place in their twenties and thirties are going to regret those decisions in their fifties and sixties?
As a financial planner, I have dealt with many clients who neglected their retirement plans until their fifties and sixties.
They usually come in for advice after seeing their superannuation statement, considered how long they have until retirement, and come to the conclusion that they don’t have enough to survive the twenty to thirty years between retirement (around age 65) and their life expectancy (age 85 to 95).
It is easy to wonder and ask myself, ‘But, why did you have to wait for this long before thinking and taking action towards retirement?’
Eventually, I realized that people often worry about the consequences of taking action. I just wish that they could see the consequences of doing nothing.
Now, let’s think of it like an AFL game.
An AFL game is split into four quarters and whoever has the highest score at the end of the game wins.
We have all seen teams who are on cruise control for the first three quarters and fall so far behind they know they cannot win the game.
The coach tries to make changes in the final term to catch up, but the inevitable happens where this team loses the game.
The same argument applies for your financial situation as well. Assume that each quarter is a “decade” i.e. first quarter is your twenties, second is your thirties, third is your forties, the final quarter is your fifties and retirement is the end of the game.
So many people “cruise” in the first three quarters without a plan or a strategy.
As a result they enter three quarter time well behind and with a lot of work needed to catch up. At this time they will hire a coach (financial planner), discuss tactics (create a plan), and go the extra mile (contribute more into super) to try and catch up.
While you can close the gap at this point, unfortunately it will not make up for the lack of coaching or tactics that you didn’t consider as necessary in the first three quarters.
Please, don’t get me wrong, I am not saying that you need to live on baked beans and two minute noodles for the rest of your life so you can ‘get ahead’.
What I am saying is that, if you are able to do a few things smarter in ‘the first quarter’, you are going to reap the rewards once the final siren goes.
As they say, the journey of a thousand miles, start with a step. That is a better approach and mindset to think about retirement – start thinking about the little lifestyle changes and financial decisions that you can make now that will lead to great rewards in the future.
If you take the hard road now, it will be easier to choose to take an easier road later. However, if you choose the easy road now, you must take the hard road later.
Be aware that when it comes to your super though, you can just play a little bit smarter and implement what I refer to as The Rule of 30.
You will be able to practically see how to walk your way smoothly from the point where you are right now, and over the year, till your retirement.
Also, on this website, I have shared several steps (such as ways to boost your income, purchasing a home and so on) that can help you to take important decisions now, that will makes you smile, and enjoy the sweat of your hard work in the future
The earlier you take action towards your retirement, the better it will be for you, your family and ensure that you have a stress-free life in your retirement.
If you want to turn your vision statement into reality, please go to www.MasterYourMoneyNow.com.au/getstarted to book in your complimentary 30 minute strategy session.
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Disclaimer: This information is general information only. You should consider the appropriateness of this information with regards to your objectives, financial situation and needs. Past performance does not guarantee future returns.
Chris Carlin is an Authorised Representative (No. 1235031 for financial services and No. 514748 for credit) and Master Your Money Now Pty Ltd ABN 65 627 229 681 is a Corporate Authorised Representative (No. 1265677 for financial services and No. 514747 for credit) of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523