5 simple things you can do to boost your retirement savings

This article first appeared in Over Sixty

There’s a lot to look forward to about retirement. You will have more time to travel, read and spend time with those you love. You might even take up a new hobby or two. But to truly enjoy this beautiful time in your life, it helps to be financially secure.

If you’re nearing retirement age, now is the time to pull out all the financial stops to set yourself up for a stress-free retirement. Here are a few simple steps you can take to boost your retirement nest egg.

1. Get out of debt

Taking debts into retirement with you is the last thing you want – so pay off any debts as fast as you can. Work overtime if possible, or delay retirement by a year or two if need be. It might feel like a bit of a hard slog for a while, but paying off debts without regular income will be much harder. Sell items you no longer need and cut down on unnecessary spending. That retirement cake is going to taste so much sweeter knowing you’re in the black.

2. Make extra pre-tax super contributions

Your superannuation is your retirement savings plan and the more you look after it while you’re still working, the better it will look after you when the time comes.

Consider putting extra money into your super. You can do this by asking your employer to contribute some of your pre-tax salary on your behalf, or you may be able to make a personal contribution if you complete the appropriate paperwork. The current cap is $25,000, including the employer contribution and the new “catch-up” legislation will allow you top up if you missed out – seek advice on details. This is an incredibly tax effective strategy that will boost your super while you save on tax.

3. Make your investments work harder

Do you know how well your superannuation investment strategy is performing? If you haven’t paid much attention to this in the past, now is a great time to start.

A lot of people prefer to go conservative with their investments later in life, but if you’re still a few years away from retirement you could consider investing in higher growth assets to build your wealth more quickly.

The right mix of conservative and high-growth strategies for you may have changed over the years so it’s important to get the right balance for your circumstances. If you like to DIY, visit ASIC’s MoneySmart website which explains some investment terminology, but note every fund is different so perhaps seeking professional financial advice before making any changes is wiser.

4. Downsize and reap the benefits

If you’re bouncing around in a big family home and no longer need the space, selling it is a great way to free up some extra cash for retirement.

If you’re over 65, you may be eligible to put proceeds from the sale of your home towards your super up to a maximum of $300,000 per person. This is on top of any other voluntary contributions you may have made.

Of course, selling an asset like this can be an emotional decision and is not to be taken lightly, but if it works for you, it could be a great earner.

There are a few hoops to jump through with this, so if you’re interested in doing it, read up on the rules via the Australian Tax Office website and get some independent advice.

5. Get professional advice

I can’t emphasise enough how important it is to sit down with a qualified financial adviser to ensure you’re setting yourself up for a great retirement.

A financial adviser is a bit like a physiotherapist who looks at an athlete’s physical condition, identifies weaknesses and devises a strategy to reach optimum fitness ahead of a big game.

A good financial adviser will be able to examine your assets, investments and debts, and develop a plan to put you in a much stronger financial position when you retire.

Money certainly can’t buy happiness, but having enough of it allows you to spend less time worrying about your finances and more time focusing on what matters to you.

By working hard to grow your nest egg now, you will reap the rewards with a worry-free retirement. The earlier you start, the better.