In your 30s, retirement may seem an unthinkably long way away, but the brutal truth is that if you desire any kind of financial freedom in your future, it requires forward planning and smart decision-making earlier in life.
By the time you blow out 40 birthday candles you should at least be considering some of the ways you can put yourself on a solid path toward financial security.
It may be difficult, even confronting, to contemplate your financial goals for the long term – but failure to act now could lead you towards a paltry bank balance and mediocre lifestyle in retirement. If you start taking action towards achieving these five simple financial goals in your 30s, you can work towards a future that includes travel, leisure, comfort, freedom and best of all, endless choices.
Goal 1: Boost your superannuation contributions
Your superannuation will contribute towards the nest egg that finances your retirement years, so whether you’re in the workforce, raising children or caring for relatives, it’s essential to make regular super contributions. This is especially important for women; according to the Association of Superannuation Funds of Australia, the average retirement payout (age 60-64) for females is $112,600, far lower than men at $198,000.
Goal 2: Buy an investment property
Consider this: the average home loan term is 30 years. If you buy an investment property in your 30s, it will therefore be fully paid off by the time you reach your 60s (helpfully funded by a stream of paying tenants), giving you a significant additional income stream. Saving a deposit for a property investment can be a challenge, so “once you have your property goal in mind, put a price tag on it,” says Michael Yardney from Metropole Property Strategists. “The key is to keep your savings goal achievable.”
Goal 3: Contribute to a life insurance policy
That valuable investment property you just bought? Now that you’ve got serious financial responsibilities, you need to protect your investments with a suitable Life Insurance policy. If you work in a professional industry where the possibility of being sued exists (thereby risking the assets you’re working so hard to accumulate), then Professional Indemnity Insurance is worth exploring, too.
Goal 4: Invest in stocks, not products
Instead of buying an $800 smartphone or $2,000 computer, invest that money into technology stocks instead. A handful of tech shares will likely be worth far more in five years than the gadgets you buy today. As CNN Money correspondent Paul La Monica advises, “Apple’s stock is cheaper than rivals Google and Microsoft… there aren’t many other quality stocks like it out there.”
Goal 5: Create a trust fund
By establishing a trust fund for your kids while you’re in your 30s, and adding to it every month, your savings will have plenty of time to compound. The result? In 20 years time, your children will have access to a small pot of gold that could help them buy their first home, chase their career dreams or travel the world.
You may be tempted to put your head in the sand when contemplating your financial future, but once you reach your 40s it’s almost impossible to ignore. By being proactive and working towards these five simple goals, you’ll be well on your way to enjoying a comfortable retirement
