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With the cost of retirement set to skyrocket in future, many people have begun to start saving for their golden years – so how can you ensure you have enough for retirement?
First, you need to work out how much you need, and then you need to consider how you can save around your home. This is where solar hot water systems come into play, as these can reduce your energy bills drastically.
How can you calculate how big of a nest egg you will need?
It is not easy to work out how much you will need once you hit 65, and your employer’s super contributions may not be enough to ensure you will be financially secure, according to the Australian Securities and Investments Commission initiative Money Smart.
However, the amount you will need to budget for depends on how long you live, your intended lifestyle and any future medical costs that may crop up. To maintain a modest lifestyle, the average person should aim to squirrel away around $23,032, or $33,120 for a couple. A more comfortable lifestyle would require $41,830 for a single and $57,195 for a couple.
How can you make extra contributions to your super?
Setting up a superfund is a simple and easy way to ensure you have an adequate nest egg when the time comes. You can choose to ‘salary sacrifice’ or make after-tax contributions to keep this fund ticking along.
What is salary sacrificing?
If you’ve heard the term salary sacrificing bandied about you may already be familiar with how this works. Your employer redirects a portion of your pay towards your super fund, which means you will save on taxes as this amount is taken from your pre-tax salary.
Instead, you will be taxed a special rate of 15 per cent. This is why salary sacrificing is also known as concessional contributions and this option may suit higher income earners best.
What are after-tax contributions?
Also known as non-concessional contributions, making these payments means won’t receive a tax deduction as a result of making these payments. However, this is a simple way to boost your nest egg as you just deposit your own money into your super account.
How can a solar hot water system help you to boost your super?
If you opt to go down the after-tax route, you may want to consider how you can change your habits in order to make savings that can be placed in your super account.
A great way to do this is by reducing your power bills and using the money you have saved to boost your retirement funds. If you switch to a solar hot water system you could save up to a quarter of the cost of your energy bill. Since these costs continue to rise, this could be a significant amount down the track.
How do solar hot water systems lead to savings?
Solar hot water systems essentially pay for themselves as they rack up savings on your water heating costs. Once you have paid off the initial cost of the unit you will not be charged for your hot water. The amount of water heated by these units can vary from climate to climate, but generally they can take responsibility for anywhere from half to all of your water heating needs.
Apricus solar hot water units are designed with a 15-year warranty on some parts, meaning you will be able to enjoy the benefits of these systems for years to come – and increase your nest egg for retirement along the way.
For more information about the units offered by Apricus, get in touch with the team. They are happy to provide advice and suggestions to get you on the track to savings.