For many Aussies, reaching the age of 40 is a great time to enjoy life. You’ve had your fair share of life experiences, skills, and money to get by. As the saying goes: “Life begins at 40”.
Many consider this period as their prime when they have the best time, means, and money, while still being physically able. To some, this is also the best time to plan their retirement. But if you do not have significant savings, should you be worried?
To answer this question, you will need to consider lots of things.
But to put your mind at ease now, you should know that there’s no reason to panic if you don’t have any savings yet.
3 Ways Things to Consider When Saving Up in Your 40s
Your life is far from over. You still have a couple of decades before your retirement; however, this is not yet the time for you to lax on your savings.
Here are three things for you to consider when saving up in your 40s.
Evaluate your civil status and lifestyle.
Regardless of your current work, salary, and source of income, the majority of your savings will depend on your civil status and lifestyle.
For example, you are single and living a frugal life. It gives you more capacity to save up than, for example, a couple in a lavish marriage. If you need to save up more for your future retirement, you may consider living more modestly now, so you may reap your efforts later in life.
As a guide to your prospective lifestyle in your retirement, the Association of Superannuation Funds of Australia (ASFA) developed the ASFA Retirement Standard. It is a suggested annual budget for households, single or couple, living either a modest or comfortable lifestyle. In general, they recommend an annual budget of $28,165 for single retirees at 65 with modest lifestyles, to $62,269 for retired couples who seek a comfortable lifestyle.
Have financial balance.
The 40s is a challenging time for many, financially-wise. There are many external pressures to make money, from getting your own place, supporting your kids’ schooling, and the prospect of retirement itself.
On the other hand, it is also the time of financial peak for many Australians. These could be in the form of a job promotion, salary raise, or even an alternative source of income. To combat the challenges with financial stability, you need to develop first a sense of balance in all aspects of life.
Plan for your retirement.
If you haven’t had any retirement plans, getting one in your forties is still a great time. By now, you have dealt with a lot of scams and other suspicious plans that led to a delay in getting a retirement plan. You just have to be aware of these dubious schemes that seem too good to be true.
If you do not consider yourself to be financially literate, don’t worry; there’s still a lot of ways to learn. There are many courses for first-time investors to help you get a grip of what’s happening at the Australian Stock Exchange, in case you want to venture in investments.
If you just want to simply save money, then you’d also get great information from many money-saving applications and programs online. Do some research and compare your options. Now, indeed, is the perfect time to save!