Investment

Investing for your lifestage

20s - invest for a financially secure future

You've got time on your side so start off on the right foot.

• Learn to distinguish good debt from bad. Good debt usually refers to borrowing funds to invest in income-producing, capital appreciating assets like an investment property or shares. Often, the interest on borrowings for income earning assets is tax-deductible.
• Start an investment plan. Investing a set amount into a managed fund on a regular basis can be a powerful way to invest for future goals. Once you get started you probably won't even miss the money. In fact, you can relax and enjoy as compound returns and time make the most of your investment over time. More
• Take an interest in your super - it's your future. Choosing a growth strategy and increasing your contributions above the minimum, even by a small amount, can make a big difference to your end retirement benefit.
  
  If you change jobs, don't forget to take your super with you. Most super fund operators offer super consolidation services. More

30s & 40s - balancing priorities

Now that you're established in your career, your salary, and income tax, are probably increasing. You may also be juggling family commitments so balance is the key.

• Seek financial advice - with so many different priorities now is an ideal time to speak to a professional financial adviser. A good financial adviser has a firm grasp of the latest superannuation, investment and tax regulations so they can recommend strategies from the simple to more complex depending on your individual needs. They can also guide you on the best investments for your risk/return profile.
• Protect your income - sometimes we take our ability to earn an income for granted. Investigate insurance options to protect your income, family and assets should the unexpected occur.
• Investing for future goals or income - starting a savings plan in a managed fund can be a powerful way to save for future goals, like a child's education for example. More
  
  Perhaps you've taken a break from the workforce or you want to supplement your salary with an extra income. Investing in an income-focused managed fund can help to maintain a regular income. More

• Balancing debts -reducing non-deductible debt like mortgages, personal loans and credit cards can help free up money for wealth creation strategies like managed funds and super. More
• Minimise tax and boost long-term savings - Strategies like salary sacrificing can minimise your tax and increase your retirement savings. Check with your employer if you can make regular salary sacrifice contributions to your super fund. You may also be able to contribute one-off payments like your annual bonus.
  
  Co-contributions and spouse contributions can also boost your retirement benefit. More

• Investing in tax-effective strategies outside super, like index funds, can also minimise your tax while helping you save for future goals.

50s - get ready for retirement

Retirement is probably not too far away now. Hopefully your financial obligations are not too onerous. Your children might be off your hands or you may have paid off your mortgage.

• Seek professional financial advice -super and taxation rules are complex, so it could be worth speaking to a professional financial adviser about your retirement income options. Now may be a good time to review your other investments to ensure they match your risk/return profile and continue to meet your objectives.
• Redirecting your money to super - through salary sacrifice or personal post-tax contributions can boost your retirement nest egg. You may be able to contribute one-off payments using salary sacrifice or take advantage of co-contributions or spouse contributions to boost your joint retirement benefit.
• Ease your way into retirement - under the transition to retirement rules you can now ease yourself into retirement between the ages of 55 and 60 without sacrificing your income.
  
  If you've reached your preservation age, you can continue working full or part time while supplementing your income with an income stream from your super savings. To benefit from the transition to retirement rules you will need to rollover all or part of your super benefit into a non-commutable income stream. More

60s- make sure your money lasts the distance

You now have lots of choices to make about how to invest your retirement benefit. Seeking professional advice about what to do with your retirement benefit is probably the best strategy at this stage of your life.

• Retirement benefit choices - Now that you have reached 60, you can access your super tax-free as a lump sum or a pension.
  
  Remember, you could be looking forward to 25 years or so in retirement so make sure your super benefit will last the distance. Including some growth assets in your portfolio can help your retirement benefit keep ahead of inflation and continue growing while you draw an income.

• Continue working while accessing your super - Perhaps you would prefer to transition to retirement rather than stopping work completely.
• Make the most of your social security benefits - thankfully the Australian government offers a safety net for retirees in the form of the aged pension. You will need to be 65 if you're male and between 60 and 65 (depending on when you were born) if you're female to access the aged pension. You will also need to pass the income and assets tests to qualify. You can find more information about the social security rules applying to income stream products at the FACSIA website.