How to save up a nest egg and reduce stress about retirement finances
Whether retirement is aeons away or just around the corner, the question of finances never really goes away. And for many of us, the thought of not having enough money to last our golden years can be a major source of stress.
In fact, according to a recent survey by investment firm, Franklin Templeton, a lack of savings is driving widespread anxiety among younger generations of Australians in particular.
The survey found that 70% of Australians in Generation Y experience stress or anxiety when thinking about their retirement savings and investments, and 74% of Generation X aren’t too hopeful about their retirement finances either.
"We often hear that retired Australians or those nearing retirement are highly concerned about the adequacy of their finances to support their retirement. However, concern among younger Australians is even more widespread," said Manuel Damianakis, Head of Retail for Franklin Templeton in Australia.
73% of Gen Y and 68% of Gen X respondents expressed concern they were behind on their retirement savings, with many convinced they'll never get a chance to retire, or will have to work part-time to fund their retirement.
"When you consider that there are so many different projections about the amount of money a person will need in retirement, and estimates can differ by millions of dollars, this general malaise about retirement finance is not hard to understand," said Mr Damianakis.
Easing that anxiety won’t be the easiest thing in the world, but it’s not impossible. Here are a few things you can do now to make sure you have a sizeable nest egg by the time you retire.
1. Make extra contributions to your super
This one is crucial. Your super fund is your main ticket to financial security late in life. By making voluntary contributions over time, you can ensure you retire with enough to live comfortably, plus reduce the amount of tax you pay along the way.
This can be done in a few ways. First, you can make a personal contribution from the income you’ve already paid tax on. But another way to go about it is salary sacrificing. That will involve chatting with your employer and arranging for some of your pre-tax income to be deposited straight into your super fund.
When you salary sacrifice into super, your contribution is taxed at 15%. If you earn $50,000, this will be on par with how much you stand to be taxed normally. But if your yearly earnings are more than $50,000, it could be significantly lower, making it a pretty shrewd money decision.
2. Create a budget
Budgeting might not be glamorous, but it’s downright essential if the goal is future financial security. That’s because tracking your expenses can help open your eyes to all the unnecessary purchases you might be making day to day.
The goal, of course, isn’t to reduce your spending to zero - unless the idea of joining a monastery appeals to you, that would be pretty difficult - but to become more mindful about where your money is going.
Nowadays, there are several apps that help you do just that. Many of them allow you to link your debit or credit card, meaning you won’t have to manually enter everything you buy. Budgeting apps like Pocketbook and MoneyBrilliant are just a few examples.
3. Automate your savings
If forging those kinds of habits doesn’t come easy for you, there is one way to get around the problem: automate your savings. That involves setting up an automatic transfer of funds, timed to take place each time you get paid.
If you’re the type of person that can’t help but dip into your savings, it might help to have a buffer in place. Try setting up a savings account with another bank, and have the portion of your pay you intend to save deposited there. That way it’s not as readily accessible whenever you’re tempted.
When picking a savings account, you’ll want to go with one that offers high interest rates but doesn’t come with conditions you won’t be able to meet each month. If you don’t know where to start, our savings accounts comparison page can help.
Savings account comparisons on Mozo - last updated 26 April 2024
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Mozo experts choice awards won:
- Kick Start Savings - 2024
High Interest Savings Account
5.75% p.a. (for $0 to $250,001)
4.40% p.a.(for $0 to $250,001)
Yes up to $250,000
Bonus rate for the first 4 months from account opening
Reward yourself with a higher rate for your good savings habits with the Rabobank High Interest Savings Account . Receive the maximum rate when you grow your balance by at least $200 each month. No Account keeping fees. No minimum balance.
CompareCompareHigh Interest Savings Account
Reward yourself with a higher rate for your good savings habits with the Rabobank High Interest Savings Account . Receive the maximum rate when you grow your balance by at least $200 each month. No Account keeping fees. No minimum balance.
- Maximum rate
- 5.75% p.a. (for $0 to $250,001)
- standard interest rate
- 4.40% p.a.(for $0 to $250,001)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Bonus rate for the first 4 months from account opening, reverting to standard variable rate. Rate shown is for Personal customers and is subject to change. Different rates apply to Business/SMSF customers.
- Access
- Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must link to a transaction account
Read our Mozo Review to learn more about the Rabobank High Interest Savings Account
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Reward Saver Account
5.25% p.a. (for $0 to $1,000,000)
0% p.a.(for $0 and over)
Yes up to $250,000
Intro bonus rate of 5.25% for balances up to $1,000,000 for the first 4 months, reverting to 3.25%. Minimum deposit of $50 and no withdrawals.
Introductory bonus rate for balances up to $1,000,000 for the first 4 months. Minimum deposit of $50 and no withdrawals. Start your account online in under 10 minutes and earn interest on balances up to $1,000,000 (T&Cs apply). No monthly account fees, helping you save smarter and faster.
CompareCompareReward Saver Account
Introductory bonus rate for balances up to $1,000,000 for the first 4 months. Minimum deposit of $50 and no withdrawals. Start your account online in under 10 minutes and earn interest on balances up to $1,000,000 (T&Cs apply). No monthly account fees, helping you save smarter and faster.
- Maximum rate
- 5.25% p.a. (for $0 to $1,000,000)
- standard interest rate
- 0% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Intro bonus rate of 5.25% for balances up to $1,000,000 for the first 4 months, reverting to 3.25%. Minimum deposit of $50 and no withdrawals.
- Access
- ATM, EFTPOS, Visa Debit, Cheque book, BPay, Branch access, Phone banking, Internet banking, Bank@Post
- Minimum balance
- $0.00
- Other restrictions
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Read our Mozo Review to learn more about the IMB Bank Reward Saver Account
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Mozo experts choice awards won:
- High Interest Savings - 2024
AMP Saver Account
5.40% p.a. (for $0 to $250,000)
1.20% p.a.(for $0 to $5,000,000)
Yes up to $250,000
Enjoy a bonus rate when you deposit at least $1000 per month with the AMP Saver Account.
No account fees. Unlimited transactions when linked to an AMP Bank transaction account. Easy online access to your money. Option to link your savings account to an everyday transaction account. 2024 Mozo Experts Choice Award winner.
CompareCompareAMP Saver Account
No account fees. Unlimited transactions when linked to an AMP Bank transaction account. Easy online access to your money. Option to link your savings account to an everyday transaction account. 2024 Mozo Experts Choice Award winner.
- Maximum rate
- 5.40% p.a. (for $0 to $250,000)
- standard interest rate
- 1.20% p.a.(for $0 to $5,000,000)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Ongoing total variable bonus rate of up to 5.40% per annum applies if customers deposit $1,000 in the previous month. Available only on balances up to $250,000.
- Access
- Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Ongoing total variable bonus rate up to 5.40% p.a. is earned on the balance the month after you deposit $1,000 and is paid the following month, on balances up to $250k. Max balance per customer name is $5 million.
Read our Mozo Review to learn more about the AMP Bank AMP Saver Account
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Savings+Bonus
5.00% p.a. (for $0 to $250,000)
2.00% p.a.(for $0 to $250,000)
Yes up to $250,000
Minimum $100 monthly deposit and no withdrawals to earn bonus interest each month.
Earn a generous interest rate on your at-call savings (T&Cs apply). Interest is calculated daily and paid to you monthly. A $5 monthly membership fee will not apply if your total account balances with First Option Bank exceed $1,000 or you have a credit card or loan with the bank.
CompareCompareSavings+Bonus
Earn a generous interest rate on your at-call savings (T&Cs apply). Interest is calculated daily and paid to you monthly. A $5 monthly membership fee will not apply if your total account balances with First Option Bank exceed $1,000 or you have a credit card or loan with the bank.
- Maximum rate
- 5.00% p.a. (for $0 to $250,000)
- standard interest rate
- 2.00% p.a.(for $0 to $250,000)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $5.00
- Maximum rate conditions
- Minimum $100 monthly deposit and no withdrawals to earn bonus interest each month.
- Access
- -
- Minimum balance
- $1.00
- Other restrictions
- Must become a First Option Bank member to open an account.
Read our Mozo Review to learn more about the First Option Bank Savings+Bonus
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Savings Account
5.35% p.a. (for $0 to $250,000)
4.75% p.a.(for $0 to $1,000,000)
Yes up to $250,000
Bonus variable rate is available for the first four months.
Competitive introductory variable rate for first 4 months (on deposits up to $250,000). No account keeping fees to pay. Multiple 2023 Mozo Experts Choice Award winner.
CompareCompareSavings Account
Competitive introductory variable rate for first 4 months (on deposits up to $250,000). No account keeping fees to pay. Multiple 2023 Mozo Experts Choice Award winner.
- Maximum rate
- 5.35% p.a. (for $0 to $250,000)
- standard interest rate
- 4.75% p.a.(for $0 to $1,000,000)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Bonus variable rate is available for the first four months.
- Access
- BPay, Branch access, Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must have a Macquarie Transaction Account to link with.
Read our Mozo Review to learn more about the Macquarie Savings Account
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^See information about the Mozo Experts Choice Savings Account Awards
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