Super in your 30s

If you are in your thirties, chances are life revolves around children and a mortgage. As much as we love our kids, the fact is they cost quite a lot.

As for the mortgage, this is the age during which repayments are generally at their highest, relative to income. And on top of that, one parent is often not working, or working only part time.

Even if children are not a factor, career building is paramount during this decade.

As careers start to hit their strides, the thirties can be a time for earning a good income.

If children are not yet in the picture, but are part of the future plan, then it’s an excellent idea to squirrel away and invest any spare cash to prepare for a drop in family income when Junior arrives.

Just remember that any savings you want to access before retirement should not be invested in superannuation.

By the time a 35-year-old couple today reaches retirement age, the effects of inflation could mean that they might need an income of about $150,000 a year to enjoy a ‘comfortable’ retirement.

To support that level of income for up to 30 years in retirement they will want to have built a combined nest egg of about $2.7-million.

If you are on a 30 percent or higher marginal tax rate, willing to stash some cash for the long term, and would like to reduce your tax bill, then salary sacrifice – pre-tax – contributions to super might be suitable.

For most people super contributions and earnings are taxed at 15 percent, so savings will grow faster in super than outside it.

Even if you can’t make additional contributions right now, there is one thing you can do to help achieve a comfortable retirement: ensure your super is invested in an appropriate portfolio.

With decades to go until retirement, a portfolio with a higher proportion of shares, property and other growth assets is likely to out-perform one that is dominated by cash and fixed interest investments.

But be mindful: the higher the return, the higher the associated risk.

Whether it’s super, establishing investments or building your career, there’s a lot to think about when you are thirty-something.

It’s an ideal age to start some serious financial planning, so talk to a licensed financial adviser about putting a plan into place so you can have everything now – and in 30 years’ time.