As we have discussed before, today is always the right time to start planning for your future. It is often said that young singles are least likely to consider life insurance, income protection and totally and permanently incapacitated cover (TPD). Although income protection may be of limited value to young singles, life insurance and TPD should be considered, in order to provide a financial safety net if you are unable to work due to accident or illness. Taking out life insurance and fixing premium payments when you are younger could be cost effective in the long run.
Young singles often have high disposable incomes; however being single in retirement can be a financial challenge especially for women who have lower average superannuation balances than men. Currently the average super balance for people aged 60 to 65, is about $94,000 for women and $114,000 for men. The Australian Financial Security Authority Retirement Standard, states that singles who own their own home need retirement income of $42,433 a year to live comfortably.
If you take action early – even making voluntary contributions to your superannuation fund over the course of your working life can make a big difference in the amount of superannuation you could have when you retire.
As with many things the only certainty in life is change, currently savings held as superannuation attract favourable tax concessions, this might not always be the case, and so it is important that your financial plan takes this into account. Similarly you may currently be married or in a long term relationship but should consider what could happen if your relationship was to break down or your partner was to die.