June 10, 2023

5 Key Investment Strategy for Everyone to Secure Their Future!

Retirement planning has become the core concern for Australians as they feel they need to do something to secure their future when they grow old.

Any investment planning should be realistic and proportionate to one’s monthly or annual income.

It all depends on the strategy that you formulate to save money.

According to the Journal of the Financial Planning Association of Australia (functioning under the aegis of Griffith University), the Australian household net worth in 2013 was AUD 6.45 trillion, and the net wealth held by older adult households amounts to about AUD 903 billion (ABS, 2013).

The journal further points out that in Australia, there are 3.3 million people aged 65 and over, representing 14.4 percent of the population, which will increase to 23 percent or approximately 8.3 million people by 2050.

Thus, if you don’t plan for your post-retirement days, you may be in trouble as inflationary trends may wash out everyone’s income in Australia.

Here are some key investment strategies to secure your future after retirement.

5 Key Investment Strategy for Everyone to Secure Their Future:

The Best Strategy to Invest Your Money for Retirement!: eAskme
The Best Strategy to Invest Your Money for Retirement!: eAskme

1. A 15% Annual Saving is a Good Strategy:

If you can save this proportion of your annual income, you can rest assured you will be sitting upon a large sum when you retire.

If you start saving 15% of your income annually at 30, you can amass a lot of money by the time you retire at 65.

2. Keep Your Monthly Budget on the Lower Side:

This strategy is very good.

You must try to save some money every month by way of rent (i.e., avoiding paying high rent), transportation or daily commutation (i.e., using public transport), minimize your night-outs and prefer to cook food at home.

Mind you, money saved is money earned.

3. Go for Long-Term Investments:

This can help you earn a substantial interest on your savings and reap the benefit of compound interest for a long time.

Since annual inflation washes out a part of your real income, long-term investments can create a buffer for you, as the interest earned can somewhat offset the inflationary trend.

Time-bound fund growth can be very much helpful for your retirement planning.

4. Opt for Higher Salary Contribution:

Both in the private and government sectors, there are standard deductions from the salary for various future schemes. Some salary deduction schemes are mandatory.

Since there would be an automatic deduction at source once you specify the % of your income to be deducted monthly, you may not feel the pinch.

But you will save a large amount by the time you retire.

5. Cut Down Unnecessary Expenses:

This does not mean you are lowering your standard of living but simply avoiding spending unnecessarily.

For example, if you go on an outing during your vacation, opt for budget hotels rather than luxury ones.

Would not it help you avert unnecessary spending? Yes, it would!       

If you’re not a pro or don’t understand the nitty-gritty of finances, hiring a consultant who offers expert financial planning services is better.

A professional financial planner offers value-added consultancy services to ensure that your money invested in different schemes yields good returns to secure your future post-retirement days.

Inflation in Australia:

Recently, Forbes reported that soon after the enhancement in interest rates to their highest level in over a decade, the Reserve Bank of Australia Governor Philip Lowe has said he is facing challenges in bringing inflation down to the target zone of 2-3%.

Annual inflation is stubbornly high at 7%, and Lowe has consistently used his post-Board meeting statements to praise his commitment to reigning in the Consumer Price Index.

Unless you go for savings, it may become more difficult for you to constantly fight inflation and price rise.

Especially for aged people, the situation may get more difficult. So, whatever you earn, ensure that 10-20% goes towards investment.

Even the Australian Government has been drawing different strategies to promote salary savings to help you sit upon a large amount after you retire.

In addition, Australia has now made private savings mandatory for employees.

In Conclusion:

In Australia, the aging population is likely to grow by 2056. The latest studies indicate that one in four individuals will be 65 or more by 2056.

This figure emphasizes the need for personal savings to meet the fund-need post-retirement.

If you still have any question, feel free to ask me via comments.

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