Whether you are entering the workforce, are in the middle of your career or are finishing up, it’s never too early to think about your retirement needs. Knowing how much money you need to live comfortably in retirement is crucial. Given it’s likely to be more than you think, consider how you can build a diverse portfolio to ensure you are taken care of in retirement.

Having a diverse portfolio – where you invest in different types of assets and securities – ensures that you’re not putting all your eggs in the one basket, so you’re reducing risk. That’s also why it’s important to not only rely on your superannuation, as generally speaking this will not be enough to feel secure in retirement.

As a general rule, most people will need 70% of their take-home pay to maintain their lifestyle in retirement. And since fortunately we're living longer, your super may need to last for 30 years or more after you retire. With that considered, the typical salary will not create enough in super to fulfill this, so other streams are necessary. Here is what more can be done.

Building your retirement funds

There are numerous investment strategies that can help you secure a decent amount to live off in retirement, including:

Investing in property and shares

Real estate can be a savvy long-term investment, providing rental income and potential capital appreciation over time. You can then also leverage your property investments through mortgages, allowing you to amplify returns. Similarly, investing in the share market and ETFs (Exchange Traded Funds) can result in significant returns over time. That said, there are risks with investment such as financial losses, so you want to do your homework and talk to a financial expert before you invest.

Adding to a long-term deposit

Long-term deposits help build your funds, earning a fixed rate of interest as you do. These types of savings accounts tend to need a minimum amount to start off with and they work best if you regularly top it up – the longer you invest, the higher the interest rate. Should you want to withdraw your money too soon from a long-term deposit, you might incur a penalty, so check the terms and conditions of your account.

Starting a short-term deposit

On the other hand, if you don’t plan to keep your money in your account for the long-term, you can still benefit from a fixed interest rate through a short-term deposit. These can last for six months or so, so this is an option if a longer-term deposit isn’t possible.

To find out more about your options, request a callback from BankVic so we can help you in your savings goals.

Information in this article is general in nature and does not take into account your objectives, financial situation or needs. You should consider the appropriateness of this information and refer to the relevant Terms and Conditions or Product Disclosure Statement before acquiring a product.

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