Found yourself separated and suddenly single later in life? Life often has different plans for us than we may have imagined.
Life after divorce (or separation) might bring with it a whole range of new things, including the need to rediscover yourself, dipping your toe back in the dating pool (hellooo Tinder) and revisiting your plans for the future, in particular, your financial plans.
An essential financial aspect to consider here is your superannuation and retirement plans to make sure you are on track and not at risk of struggling in your later years.
According to the Association of Superannuation Funds of Australia (AFSA), a single person requires a lump sum of $545,000 to live a comfortable retirement, and this is on top of owning your own home.
If this sum sounds a little daunting, don’t freak out. There are steps you can take now to boost your super and ensure your divorce doesn’t derail your financial future.
If you haven’t already gotten your superannuation in order, this should be the first step on your action plan.
This should include:
Topping up your superannuation is a great way to boost your retirement, particularly for those in the higher income tax brackets.
Salary sacrificing allows you to direct a portion of your salary to superannuation pre-tax, so that you will only pay the superannuation tax rate of 15% instead of your marginal tax rate.
The sooner you can start adding extra to super, the better, no matter how small the amount, thanks to the power of compound interest.
When was the last time you re-evaluated your career path? If your career went on the backburner behind your relationship, parenthood, or just general life, it might be time to stoke up that career fire again.
Advancing your career can provide opportunities to increase your income and benefits, which also increases your employer contributions and ability to make additional superannuation contributions.
Not all superannuation investments were created equally…
Some investments are quite conservative, investing in cash, term deposits and other defensive investment types. These investments are lower in risk, which also means they generally offer lower returns.
Some investments are quite aggressive, investing in shares, property, and other growth investment types. These investments are higher in risk, which also means they generally offer higher returns.
If retirement is still quite a number of years away, now is the time when you can be aggressive with your investments – taking on a higher level of risk to gain higher potential for investment growth and returns, as you have a longer investment timeframe to ride out market fluctuations.
You now need to look out for number one, so it’s essential to have a risk protection insurance plan in place to ensure you are covered in the event of death, disability, critical illness and/or the inability to work.
This cover might include:
Life after divorce or separation takes some adjusting to and revisiting your plans for the future as a single can be daunting.
If you’ve found yourself starting over and are unsure where to start, reach out to a Financial Adviser who can help assess where you are now, set financial goals for your new future, and put a plan in place to help you secure your financial future!
You need to consider with your financial planner (or adviser), your objectives, financial situation and your particular needs prior to making an investment decision. Sensibly Pty Ltd and its authorised representatives (or credit representatives) do not accept liability for any errors or omissions of information supplied on this website
Nick Shanley, Steve May, Luke Styles and Shanley Financial Planning T/A Steve May Financial Services are Authorised Representatives / Corporate Authorised Representative of Sensibly Pty Ltd, AFSL 533923. Please refer to our website at www.stevemayfs.com.au to reference our Financial Services Guides.
Shanley Financial Planning Pty Ltd trading as Steve May Financial Services (ABN 19 612 825 180) is a Corporate Authorised Representative of (1265706) of Sensibly Pty Ltd (AFSL 533923)
Nick Shanley, Steve May and Luke Styles are Authorised Representatives of Sensibly Pty Ltd (AFSL 533923)