No matter what your financial position is, or how much money you make in your job I think we can all agree that money is more fun when it’s spent rather than sitting aside in a savings account. However, the reality is that most of us want to maintain a certain level of lifestyle when we retire. Retirement is a long-term goal, and one that should be considered but often it’s not enough to motivate savings plans.

To get you thinking about what might motivate you to start your savings plan, here is our take on the three-bucket savings approach.

Bucket one: Daily capital.

This should contain savings that equate to what is reasonable from your paycheck. This should ideally sit around the 50% mark. Each time you get a raise or additional income, try to add 50% of that amount in addition. Working with your accountant to work out exactly what amount you should be putting away versus your expenses makes it easy to calculate the percentage.

Bucket two: Eliminate Debt.

Let’s face it, unless you are currently in the process of winding up work or are making plans to – no matter what you do for work, retirement savings are usually cast aside as something to deal with “later” in life and therefore may not be a motivation to save for some. Instead, the money that you would save – use to pay down debt. This puts you into a financially favourable situation and is usually a quicker win and reward when compared to long term saving plans. Your accountant will be able to provide you with an assets and liabilities report that demonstrates which debts are costing you the most and should be paid first.

Bucket three: Fall in love with your vision.

It makes sense to start planning how you will accomplish your retirement goals early on. Your target amount should be decided based on what your future plans are. Will you sell your property? Keep it? Leave a legacy for your kids? Will you travel or retire to a beach side mansion? These plans can only be fulfilled if you have the finances to achieve them. Did you know that to retire at the age of 65 on an annual income of $100,000 you need in excess of $3,000,000 in funds? You should assess how well your super fund is performing against others, and get the advice of a wealth management expert to work out how to maximise your retirement savings.

No matter which bucket you want to fill first, our Commercial Concierge team can help you get it to the brim faster. To get advice on your wealth strategy or succession planning, get in touch with our concierge today.

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