As a single woman in her 50’s, life is probably looking very different to the way it did ten years ago. Your kids are grown and (mostly) self-sufficient. At the very least, they are no longer raiding the fridge on a daily basis, and you’re not responsible for paying school fees or for all their extra-curricular activities. Hopefully, you are earning more than ever and you feel you have greater disposable income.
This is the perfect time to take a good look at your financial wellbeing and identify any areas for improvement.
7 steps to financial awareness in your 50’s
Ideally:
You have finally perfected your cash flow: You know how much money goes in and out each week/month/year and you are saving (and investing) at least 20% p.a.
You are salary sacrificing hard: The maximum is $25,000 per annum, which includes your employer super guarantee. Remember, Super after 60 years of age is tax-free in pension mode - there is no tax on payments, income generated in super, and no capital gains tax event.
You have reviewed your insurances: Keep only those that are still required. Do you need life insurance if you have no debt and no dependents relying on you? One of our clients had no dependents and no debt, but she was maintaining an unnecessary $1M life insurance policy, which cost her $2,500 p.a.
Your super is working hard for you: Contribute regularly, invest your super in funds of your preference, and don’t pay expensive fees. Some of our clients prefer ethical investments so they know their super is making a difference in the world.
You have clear retirement goals: Figure out when you plan to reduce your work hours and when you’re going to fully retire. Know how much money you will need to fund your retirement lifestyle.
Your debt (mortgage) is either paid off or nearly repaid: Review your mortgage interest rate and make sure you are paying market rates. Channel your savings into an offset account and accelerate your mortgage repayments with an aim to retire debt-free.
You have updated your will and legacy wishes: You have nominated beneficiaries in your super fund.
It is possible to effectively manage your money at any age, but your 50’s are a good time to boost your financial literacy and plan for a successful retirement. There’s a good chance you’ve spent a long time raising children and paying off a mortgage, so if you have a little extra money in your budget, make sure you take the opportunity to treat yourself and invest towards any future financial goals.
If you would like to improve your relationship with money and plan for your future, please contact TruWealth on 03 8648 6534 or email contact@truwealthadvice.com.au
General Advice Warning: The information in this communication is provided for information purposes and is of a general nature only. It is not intended to be and does not constitute financial advice or any other advice. Further, the information is not based on your personal objectives, financial situation or needs. You are encouraged to consult a financial planner before making any decision as to how appropriate this information is to your objectives, financial situation and needs. Also, before making a decision, you should consider the relevant Product Disclosure Statement available from your financial planner.