032- Employee Retirement Funds

For many of us, most of our retirement money comes from an Employee retirement fund… either ours or our partner’s.  One of the biggest assumptions that people make is that the employer will take the right amount of money from your paycheck so that when you retire you’ll have enough.  However, this is not the case.

Never assume that employers are taking the right amount of money to allow you to retire

  1. They have no idea what your previous saving level is
  2. They have no idea how much you need to retire
  3. They need to take an amount the average person in the company can forego for saving

Choose the most money you need to save and where you invest it

  1. Take the highest amount you can – both in terms of what they take your total salary package to be, and the highest percentage you can for saving.  You should be saving 20%
  2. Note that the amount the company often also takes Life insurance and disability insurance – so that means that the 20% must exclude life insurance.
  3. Maximise what your employer pays
  4. Invest based on your risk profile – high, medium or low equities or shares mean high, medium or low risk.  The younger you are, the more risk you can take

It’s your money, manage it

  1. You’re paying for the employee benefits consultant – when they offer a consultation, go, and get them to explain the investment and return its had
  2. When you move money, never, ever, ever cash in.  Make sure you move the money onto an independent fund and platform, don’t move it to your next employer.  It diversifies your risk of all your eggs in one basket
  3. Keep all your retirement funds separately – it gives you way more flexibility for both investing and when you retire.  You can draw each of them at different times.
  4. Read at least one article a week – the more time you spend on your money, the more it will be able to work for you.

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