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Ways to Save More for Retirement

Published by: LifeWorks,

Saving as much as you can for the day you stop working makes sound economic sense. And you may have options you hadn’t considered. Depending on your goals, you may want to take a fresh look at your spending habits, revise your savings plan, or get help from a financial advisor or debt-counselling service. The most important thing is to make saving a top priority and keep looking for new ways to save until you find the way that works best for you.

The importance of saving in midlife

Saving is important at any age. But it may become especially important in midlife as retirement approaches. There are two good reasons to save more for retirement at this age.

You may be at the peak of your earning power. Most of us reach the peak of our earning power between the ages of 40 and 60. This means that in midlife we may have more money to save than we will ever have again. Even if it seems hard to save now, it may be easier than it will be later in life.

The more you save, the more secure your future is likely to be. Take a look at any savings plans you developed earlier in life. Many people underestimate how much money they will need to retire. Some studies have reported that as many as half of Australians don’t have enough money put away in their superannuation to retire on, particularly as life expectancy increases. Increasing your savings now, even if it means making sacrifices, will help you achieve a more secure future.

Reducing your expenses

To save more for your retirement, you may need to reduce expenses. Look for ways to save that align with your present and future goals. Here are some tips:

Know where your money is going. You may be spending more than you think, particularly on out-of-pocket expenses, such as food, clothing, and entertainment. Track all your spending for a month by making notes of what you buy and saving and categorising receipts. Then draw up a budget that shows your goals for spending and saving. Your bank or your organisation’s assistance program may provide free budget-planning resources.

Couples should examine their spending and saving habits together. Even if one person is a spender and the other a saver, it’s important to have open and regular communication about finances, set financial priorities, and devise a budget together.

Get the lowest credit card rate possible. Check your statements or call your credit card companies to find out the interest rate (APR) you’re paying on your cards. Then shop around for cards with a lower APR, or consider consolidating your debt into a bank loan with a lower rate. Some companies will lower your APR by several points if you call to request it or may offer incentives to keep your business. You can find information, FAQs, comparisons and latest updates on credit card interest rates on the website Finder.

Pay off your credit card debt. Debt is costly. Make it a top priority to pay off credit card debt. Pay your credit card bills faithfully each month, and try to pay more than the minimum due. Work to eliminate the debt starting with either the card that has the smallest balance or the one with the highest interest rate. Then move on to the one with the next lowest balance or highest rate, and so on. If you have trouble paying the minimums, ask if the company will help by, for example, suspending your interest payments for a few months. Get into the habit of paying off your cards in full each month so you don’t have debt in the future.

Use cash instead of credit cards. Using cash or a debit card will prevent you from spending money you don’t have.

Consider getting budget or debt counselling. If you have so much debt that you can’t get it under control through your own efforts, visit the Moneysmart website’s page on debt. There are free resources available to help you get your money under control, including the National Debt Helpline.

Cut back on eating out and takeaway meals. You might save hundreds or thousands a year by cooking most dinners at home and bringing lunch to work.

Take advantage of discounts for people your age. You don’t have to be 65 to qualify for many discounts. If you’re a National Seniors Card holder (for those 50+), you can access a range of discounts. Over 60s in most states can access discounted public transport.

Save on prescription drug costs. Ask your health care provider if you could substitute a generic medication for a brand-name drug, or shop around for the best prices at pharmacies.

Review your insurance policies. Think about whether it would make sense to have higher deductibles on your car, homeowners’, health, or other insurance. If so, you might be able to save hundreds of dollars a year on your premiums.

Cut back on shopping. Avoid temptation to shop for luxury items until you’ve paid off your debt or met your goals for reducing your expenses. Switch to a cheaper supermarket and buy supermarket own brand items instead of brand names. You may also consider looking into a local produce market, veg box scheme or bulk grocer like Costco.

Saving more for the future

The best way to save more for retirement depends on your needs and goals. What’s important is to put aside as much money as possible into savings programs or plans, month in and month out, until your retirement. Choose the plan that’s right for you. Here are some options:

Superannuation fund

It’s compulsory for employees in Australia working more than 30 hours a week and earning over $450 in a calendar month to be paid superannuation by their employer. You can nominate your superannuation fund and also elect to salary sacrifice to pay a higher percentage of your pre-tax income into your super, which is then not included in your taxable income. Additionally, you can add to your superannuation from your post-tax income, which the government will match up to a certain level.

If you’ve had gaps in your employment where you didn’t contribute to your super, for example if you took time off to care for family members, you may need to increase your contributions so you can make up for lost time. Many Australians also have several superannuation funds, which means you’re losing money paying several sets of fees: it’s easy and quick to roll your accounts into one. The ATO offers a ‘lost super’ service—any accounts in your name can be found and consolidated into your main account.

Consumer advocacy group CHOICE offers a comprehensive guide to superannuation funds to help people choose the right one for them.

Savings accounts

Traditional savings accounts pay a fixed, low rate of interest, and the amount required to open a savings account is usually very low.

Term deposits

Term deposits are accounts that typically pay slightly more interest because you agree to leave your money on deposit for a fixed period, which may range from one month to five years or longer. Usually there is a penalty fee if you withdraw your money early. The interest earned on term deposits is not tax-deferred. Look for the best interest rate and make sure your deposit is insured by the FDIC.


You can find out if investing through shares, bonds, indexed funds, and annuities would be right for you by doing your own research or by talking with a financial adviser. See the Moneysmart website for information on how to find a reliable financial planner. If you have only a small amount to save, a financial planner may suggest an account that lets you set up an investment plan by making regular investments of relatively small amounts, such as $100.

Revising your savings plan as you get older

Continue reviewing your savings plan. Most experts suggest that you do this at least once a year. You may want to review your plan at the end of the calendar year or when you do your taxes. It’s also a good idea to take a fresh look at your savings plan if you:

  • get a raise, bonus, inheritance, tax refund, or other source of income
  • finish paying for a house, car, or child’s education
  • realise that you may need to provide financial support for an aging parent
  • are thinking about retiring early, reducing your hours, or working part-time
  • are facing changes in the economy, such as higher interest rates

Keep looking for new ways to save. Many people retire sooner than they had planned or face unexpected expenses after they stop working. The best way to be prepared is to make a habit of saving as much as you can all through life.

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