It’s World Smile Day, and nothing makes savvy savers happy like a strong retirement savings plan.
According to the Australian Super Funds Association (ASFA), “A couple looking for a comfortable retirement needs to spend $55,213 a year, while those seeking a ‘modest’ retirement lifestyle will need to spend $31,760 a year.”
ASFA considers your comfortable retirement to include a broad range of leisure and recreational activities while maintaining a good standard of living. This includes being able to buy household goods, private health insurance, cars, clothing, electronic equipment, etc. Of course, domestic and occasional international holiday travel is factored in.
The travel and leisure funds for comfortable retirement should give you more than $15,000 to play with each year. If you are one of many Australians saving for the most comfortable retirement, what plans do you have for your savings? If you plan to take the grey nomads route, you could be set for plenty of mileage from your savings.
Research from Tourism Australia also shows mature Aussie travellers prefer driving holidays over flying, while young Australians prefer to take the flight option.
The good news is, your caravan can be a converted old bus or luxurious van. Even hiring a luxury camper would see your $15,000 last two months or more. If overseas is more your style, a 10-night cruise in a luxury cabin might set you back around $4000, and factor in another $3000 for flights. Australians on the ‘comfortable’ retirement budget can afford to take a cruise each year – even to somewhere as far away as Alaska. To make that trip a reality here are some tips on saving for a holiday
Meanwhile, Australian retirees’ average spend is more than $15 billion each quarter. So how do you make sure your savings are on track enough to channel this spending into things that make you smile?
An online savings plan could give your funds better mileage with high interest savings. Australians lose billions in lost interest each year through not choosing the right savings account. And savings are proven to bring the smiles because our research has previously showed regular savers make happier people .
You could also boost your retirement savings with pre-tax contributions. Anyone under 65 and anyone aged 65 to 69 who is still doing paid work can contribute $25,000 before tax plus $150,000 in after-tax contributions.
While you are focused on getting some happiness from your savings, avoid higher fees from multiple super funds from previous years. RaboDirect can have any existing super rolled over on your behalf.
You will soar beyond that $15,000 annual travel buffer far quicker if your retirement savings plan includes paying off loans. Paying into that home loan with a 7 per cent interest rate means you are now scoring a guaranteed 7 per cent on any money paid in. Once you are paid up, remaining funds can be channelled into a high interest savings account.
Some control over your own savings could put a smile on your face, and even late-starters can bolster their retirement dollars with better financial habits.
Taxation considerations are general and based on present taxation laws, rulings and their interpretation as atthe date of this article. You should seek independent professional tax advice before making any decision based on this information