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Fatherly advice
Zac, 25, has a clear financial goal. “I plan to retire at 50,”[*] he says. “It’s ambitious, but it’s a good goal to aim for.” Lots of young people share Zac’s dream, but not many share his disciplined commitment to achieving it. “Dad helps me with lots of advice,” Zac says. “He encouraged me to start saving early.” Zac says his father (Tony, 55) takes a keen interest because he doesn’t want Zac to make the same mistake he did. “When we were kids we had a comfortable life and never wanted for anything, but Dad says he didn’t plan for his retirement. He wishes he’d started saving much earlier. Now, financially, he’s not as ready for retirement as he’d like to be. Tony’s advice has clearly set Zac on the right path. “It’s important to plan your retirement as early as possible because the more money you save early on, the more it compounds later. Putting a little bit away each week early in your career can really snowball in later years. This is why I started a managed fund investment at just 20.” Five years later, Zac still makes regular monthly deposits into the managed fund investment. His wife Sarah, 27, whom he married two years ago, invests in the fund too. The couple also have their superannuation hard at work. Zac recently switched his super into the Russell LifePoints Target Date 2030 Portfolio. “I chose the 2030 fund because that’s the year I turn 50.”[*] Zac likes the fund because his employer pays his super directly into it and there’s nothing else for him to do until it’s time to take it. The ‘set and forget’ nature of the Russell LifePoints Target Date 2030 Portfolio is popular with people who, like Zac, have a busy lifestyle. In one simple choice, Zac has ensured his super will always be diversified across many hundreds of investments. “While I’m young, the fund invests mostly in growth investments to build my balance. As I get older it eases off the growth investments and moves into more conservative investments to consolidate my balance for retirement. It’s all automatic. I don’t have to do a thing.” Zac isn’t making extra contributions into super yet. Instead, he pays into his managed fund investment, so he’ll have that to live on for his first ten years in retirement until he can get his super. “I like having two separate sums of money growing for my retirement. It feels more secure.” Zac is a journalist covering the Australian Football League. He worked initially as a copy boy before commencing a two-year cadetship. He’s been a graded journalist for two years. He counts himself as pretty lucky to work doing something he loves – watching footy. He loves playing it too, but one of the sacrifices he’s made for his job is that he now spends weekends watching the game instead. Sarah works finding employment for people with disabilities and providing them with on-the-job support. Zac and Sarah built and moved into their home in the Adelaide Hills in 2002. To pay it off faster, they’ve set their mortgage repayments above the required level.
More recently, they bought into a family-owned investment property on Kangaroo Island. It’s an The couple have no children yet, but plan to start a family soon. “We wanted to travel a bit first,” explains Zac. “Last year we went to Europe and the UK for six weeks. We saw ten European countries over four weeks and spent the remaining time in the UK. Fantastic.” One highlight, for Zac anyway, was a trip to Sheffield to watch his favourite UK soccer team play a match. By embracing his father’s advice and taking a disciplined approach, Zac stands a much better chance than many of his peers to achieve his retirement goals, to enjoy more time at Kangaroo Island and perhaps head over to Sheffield for a game or two in his retirement years.
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Achieve is issued by Russell Investment Management Limited (RIM), ABN 53 068 338 974, AFSL 247185. In preparing this information we haven’t taken into account your own personal circumstances, including what you want and need for your financial future. It is important for you to consider these matters and also to obtain and read the relevant PDS before you decide whether to acquire or to continue to hold a product. Go to www.yoursupersolution.com.au to download a PDS. Interests in Russell SuperSolution are issued by Total Risk Management Pty Ltd.
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Zac's Dad didn't start saving for retirement until much too late. It's an example he's encouraged Zac not to follow... with some amazingly good results. 