There may be debate about raising the pensionable age, but following these simple tricks can help millennials reach retirement sooner or later.
Millennials are growing concerned about how they will finance the future, given new models that suggest the nation’s pension age should be raised to 70 by 2050.
Declining birthrates and an aging population are the main drivers for the need to raise the retirement age, according to a study by Macquarie University Business School.
As a result, Australians will be forced to either work longer before they qualify for a pension or save more for their retirement pensions so they can retire early.
And with soaring costs of living, plateauing salaries, and sky-high rent and loan repayments, the latter option is a tough pill to swallow for some.
But it’s not time to give up yet, says entrepreneur and author Kim Northwood, explaining that understanding financial literacy could be the key to getting out of your last job sooner or later. there is
“It’s getting harder and harder for people. Now we’re under attack from all directions,” he told news.com.au.
“It is very important to manage your finances from a young age (and) the important thing is to manage your own money and understand financial literacy… When you think about it.”
Kim Northwood is a long-term investor and author of the book Work Less, Make More.Photo: Attached
10 tips to get your money in better shape
While juggling mortgages, student loans, credit card repayments, and basic living expenses may seem like rocket science, Northwood says there are several approaches you can take to increase your finances in the future. Told.
The first step, which I’m sure most of you have heard of, is to add additional contributions to your Superfund while you are working. This could make him as much as $100 per week.
“With an average Australian income (around $71,000 a year), investing an additional $100 a week in supermarkets will add $400,000 to your retirement savings over 40 years or so,” Northwood said. ‘ said.
“And when retirement approaches, it’s very easy to make additional contributions because all the extra money is left over and can be used for vacations, paying off the rest of the house, and so on.”
On the same topic of superannuation, Mr Northwood said Australian workers should check to see if they have received unclaimed superannuation from MyGov.
According to the Australian Taxation Office, as of February this year, the lost and unclaimed value of supermarkets reached $16 billion, up $2.1 billion from the previous financial year.
The Australian Tax Office has $16 billion in lost or unclaimed super, and that could include your money. Photo: iStock
A third tip applies to homeowners. Work less, earn more The authors advise mortgage holders to consider refinancing their mortgage to get a lower interest rate, especially if they’ve been with the same bank for a long time.
New customers tend to get better deals than existing customers, he said, and some banks are re-evaluating current customers’ mortgages to keep them from moving to another bank. pointed out that it is positive.
Tech-savvy millennials are also encouraging investments in the stock market, and Northwood said it’s easier than ever to access stock exchanges and trading platforms online.
“With the push of a button, you can own virtually all of the world’s leading companies through these apps … so understanding how you can get involved when you have excess money to invest. I think it’s very important,” he said.
Northwood’s fifth piece of advice is directed at credit cardholders, shedding light on one of the biggest misconceptions investors have about payment cards.
“So many people don’t understand how the interest free period works. days,” he said.
So he urged credit cardholders to better understand how the billing cycle works. Otherwise, consumers risk facing monthly interest and late fees.
He also encouraged banks to pay more than the minimum fees, giving examples of how a $4,000 balance could take up to 40 years to pay off if only the minimum payments were made.
Millennials should refinance their mortgage or review their credit card debt to see if they can save even a little. Photo: iStock
Lack of insurance or having unnecessary insurance can cost you a lot in certain situations, especially when it comes to international travel and health insurance.
“I still know people who go on international trips without insurance, but they are worried about their personal finances, such as what can happen abroad and how much it will cost. We’re just rolling the dice when it comes to things, which means it can just be an incredible amount of money,” he said.
Alternatively, health insurance, home insurance, and auto insurance may be cheaper if you don’t necessarily need all levels of coverage, so it’s important to check for additional coverage and coverage. Mr Northwood said.
A seventh tip, older generations are particularly vulnerable, is to get fed up with the ever-increasing number of scams.
“There are some really bad stories about intelligent people getting scammed because they see stories about cryptocurrencies going up so much and people making this much money and they do the same thing. But it’s actually a scam,” Northwood said.
“Once the money is out, it is very difficult to get it back…the options are very limited, especially if the money is out of the country.”
So far this year, Australians have lost more than $194 million to scammers, with another $568 million lost to scammers last year.
Australians have lost millions of dollars to scammers this year in money that could have been used to fund their retirement. Photo: iStock
Northwood’s penultimate piece of advice is for people paying utility bills and personal bills, especially in relation to technology services such as cell phones.
“So people are spending $70,000 to $80,000 on their phones in their lifetime, including phones, bills and apps,” he said.
Rather than spend a fortune buying a new cell phone each year, Mr. Northwood advised buying a cell phone outright and searching online for cheap deals through smaller phone companies.
He also noted that the same concept applies to cars, arguing that cars tend to depreciate in value “as soon as they leave the dealership,” so it might be better to buy a used car than a new one in some cases. .
“Cars are really tricky because you can have a car loan and usually have high interest rates, plus maintenance and fuel costs and also some typical costs,” he said. says.
Finally, the last two important tips are to learn how to budget and improve your understanding of financial literacy.
When it comes to shopping, for example, Northwood said many consumers don’t understand what strategies supermarkets use to get them to buy more.
This includes storing confectionery at the cash register, keeping essentials such as milk within walking distance, needing to look at other items first, and buying in bulk, although it doesn’t always work. This includes the idea that it will lead to savings.
On the other hand, when it comes to utility bills, there are many comparison sites and consumer websites that can help you find better plans.
“Going back to financial literacy, one of the best things young people can do is improve their financial literacy because if they don’t manage their money, someone else will. , Just like banks, they should improve financial literacy,” he said.
“It is important that young people start learning more about money management so they can start saving some money for themselves without being abused.”
Mr. Northwood said financial literacy helps pave the way to a healthy retirement. Photo: iStock
The Path to a Healthy Retirement Life
Northwood’s tips sound great in writing, but the only way to increase workers’ retirement benefits is by putting them into practice.
The long-term investor said there is “no reason” young workers can’t start saving for retirement “immediately.”
“[Early starts]make a big difference years later. It’s the difference between retiring early and comfortably for some people, or having to work until they can get an old-age pension at 70. will be,” he said.
On the contrary, Northwood said it’s never too late to start, pointing out that working baby boomers and Gen Y can take advantage of tips to save a little money for retirement.
“Retirement is a very sensitive topic, but people are living longer and government finances will be strained when it comes to old-age pensions,” he concluded.
“So what I want to say to young people is that there is absolutely no guarantee what will happen when it comes to whether the pension age will be raised.
“It’s best to protect yourself now and do everything you can to build your own wealth so that you don’t depend on it in the future.”
