It all sounds easy enough – put extra into super, put this much into super etc etc.  However, life isn’t always as black and white as that.  We often have obstacles with our plans for the future.  Here are a few of the potential barriers you could face so that you can at least be aware of them.

1. In a habit of living a ‘champagne’ lifestyle

You are young with limited financial responsibilities and quite frankly, cannot see the point of thinking about something that seems so far away into the future.  However, if you are that way inclined to enjoying the finer things, you’ll probably want to carry on doing so after you’ve stopped earning an income. Take time to look at what you’re spending now and then compare it with the income you can expect from your super balance when you retire. If you just rely on your employer contributions will you have enough? A financial planner can help you with a plan to build up your savings gradually and still keep enough day-to-day budget for the things you enjoy. It’s a great way to make sure you can keep living in the style you’re accustomed to in retirement.   The earlier you start the less impact it will have on your weekly income.

2. Tap away at your debt

Reducing the most expensive loans and liabilities first is a good starting point and saving on mortgage interest by getting ahead on payments runs a close second.  It definitely makes sense to pay off debt as soon as you can, particularly when interest rates are higher like credit cards and personal loans.

A house, unlike super, is not an asset you can earn income from, unless you rent it out. If staying in your home after you retire is important to you, selling it to give you an income won’t be an appealing option. Coming up with a plan that allows you to build up your super balance and work towards being mortgage free will give you the best of both worlds. You’ll have a comfortable, familiar home plus enough money to enjoy your time spent living there.

3. Kids

Kids will definitely top the list for expenses however, you wouldn’t have it any other way.  You want the best for them.   But all those golden opportunities for your kids will come at a high price if you can’t provide for your own needs in retirement. So saving for your super helps them as much as it helps you. A decent retirement income means you can remain independent as you grow older and pay for your own care.

4. The long haul

Saving enough to live on for a couple of decades is a big ask. Sometimes, when we’re faced with such an enormous commitment, it can be easier to just shrug it off as something that’s just too hard to be worth making a start on.

If running the numbers for your ideal retirement income and super savings plan is beyond you, consider salary sacrificing as a way to build up your super. Thanks to potential tax concessions on contributions from your gross salary, and the power of compounding returns, even a small monthly contribution can make a significant difference to your super over time, with much less impact on your current take home pay and cash flow. And the sooner you start, the better your chances of accumulating enough super for a secure retirement, with very little effort.

Whatever your priorities are, a CERTIFIED FINANCIAL PLANNER® professional can offer valuable advice on getting the balance right between spending on your immediate needs and saving for the future.