Choose your retirement savings account Comments Off
Everyone knows that we become a wee bit frugal about how we spend our money as we grow older. Are you thinking of how to save up more money for your retirement? You are definitely not alone!
Many banks, building societies, financial institutions, credit unions and life insurance companies offer you to the best retirement savings accounts from them. But the tricky part is figuring how to choose a good provider, because the key is to start saving for your retirement early. The sooner you start putting money aside for retirement, the more time your money grows and works for you. If you have not started saving, now is the best time to start and contributing regularly to your best retirement savings account chosen and it should be one of your utmost priority. Don’t even think about getting financial support from other people when you get old. It is your responsibility to make hay while your sun is still shining.
Benefits of opening the best retirement savings account
1) Stress Free Savings
You are sure to make regular contributions to your savings account because it is automatically deducted from your weekly or monthly pay check, which makes saving for your retirement stress free.
2) Pay lower taxes
If you use the best retirement savings account where your contributions is taken from your pay check – your contributions comes out before taxes are figured. This means you get to pay a lower income tax while you are contributing for your retirement.
3) The Federal Government Deposit Guarantee
Your retirement savings is in safe hands. On 12 October 2008 the Australia Federal Government announced plans to guarantee all money on deposit made at Authorised Deposit taking Institutions (ADIs) regulated by the Australian Prudential Regulation Authority (APRA).
All money on deposit with Authorised Deposit Institutions (ADIs), the Federal Government Guaranteed free of charge up until 28 November 2008. After that date, the Government has applied the following conditions: If your total deposits with the Bank are less than $1 million, they will continue to be covered by the Federal Government Deposit Guarantee at no charge.
How to choose the best retirement savings account
There are several options to choose from but in my opinion the best option is first using your existing workplace retirement savings account. Why? Your company should have preferred providers for your superannuation/retirement savings accounts. They have already made it easier for many workers (especially people with zero financial discipline) to save for their retirement. I would personal to stick with the current one and observe the performance rather than jump around.
a) Identify Authorised Deposit Taking Institutions (ADIs) – Check with Government website and make sure the financial institutions are in ADIS list. This means they are trusted and this will give you a peace of mind. http://www.apra.gov.au/adi/
b) Return of investment (ROI) and performance – You sure want to earn more money for your best retirement savings account chosen and it is better to review your investment performance from time to time. Review your investment every 6 to 12 months. Keep your options open for investment option, however it is your responsibility to make sure you are archiving your retirement goal.
c) Fees and hidden costs – Keep your eyes on those fine prints and terms and conditions for your so called best retirement savings account. Some banks may have higher administration fees than the others. Make sure you interest earned is higher than your administration fees, etc.
Lastly if you are self employed and do not plan to work for anyone now or in the future. You can open an individual Savings account and make a strong commitment to contributing to your chosen best retirement savings account every week or month. Begin with your first step to save money for your future.