• Alison Kaigan

Why is super important?

Considering that for many people superannuation is either their biggest asset, or biggest asset after the family home, I feel that it’s often overlooked. I understand that it may not be as enjoyable as driving around in that new car, or as interesting to talk about as your last overseas holiday. But you know what you don’t hear people talking about much? Having no money in retirement.

In the age of having instantaneous access to things on our phone, I think sometimes there’s too much focus on the short term and not enough focus on the long term. And super is definitely a long-term thing. As a financial adviser one of the things I help people with is saving for a home. This involves going through spending details to see where we can find savings. It’s not uncommon to find things like $250/month on nails and eyelash extensions, and $100 a month on brunches, for example. These are things that I expect bring temporary enjoyment (or people wouldn’t do them!), but I imagine it won’t be remembered in a year or two’s time. But this equates to $4,200 a year – and that’s just those two things! Can you imagine what an extra $4,200 a year might do for your super balance over your working life?

If you haven’t done so recently, sit down and have a serious think about your financial future and wealth accumulation plan. Work out if you’ll be able to repay the mortgage before retirement, if you don’t own a home work out how you’ll pay for housing in retirement. Have a think about your lifestyle in retirement too, and how you might pay for it – and no, it won’t just magically pay for itself!

I realise it’s a long way away but it’s generally very important to start early, and this is something that I impress on my financial planning clients. What’s the worst case scenario if you start too early – perhaps you miss out on some experiences when you’re young and maybe even save more than you need? But what’s the worst case scenario if you leave it too late – perhaps you run out of money, have insecure housing when you’re 80 years old and can’t afford to fix that sore tooth? I know which one I’d prefer!

Alison Kaigan – Your Canberra Financial Adviser


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