Your future's on the line. Don't stay on hold in 2025

If it still feels like you just left 2024 behind, time may be flying by so fast it’s hard to plan for the weekend, let alone for something that may be years or even decades away. 

New research from CFS bears this out, revealing only two in five* Australians feel prepared for life after work and less than half expect to be able to live comfortably when they get there.

Getting on top of your finances is one of the most common new year’s resolutions, set by one in two Australians, according to new research from the government’s Moneysmart website. Despite that, only one person in eight sticks to it.

In contrast, new data on the secret strategies of the wealthy indicates nine in ten of the well-to-do have set a long-term financial goal, such as identifying the age at which they want to stop working. 

So, as 2025 gathers momentum, we’ve put together a plan to help you look after your future self by taking one crucial step towards getting your long-term finances in order.

A key difference between those who have planned well for their long-term future and those who haven’t is making the decision to set a specific, long-term financial goal. 

This might be the age at which you want to retire. You might want to travel for a year when you stop work. Maybe you’re planning to move, or take up a new hobby.

Whatever it is, once you’ve got a vision for your long-term future, you can establish the short-term and medium-term goals to help you get there. 

Most people will have a mix of short-term and longer-term financial goals that are very personal to their needs. 

The beauty of setting short-term goals is that once you are in the habit of setting money aside to achieve them, it should be easier to maintain that discipline and direct that money to achieving your longer-term objectives. 

• Short-term goals are things you would expect to achieve within the next five years.
  These might include paying off credit cards and other higher-interest debts, getting your super in order, saving for a holiday, accumulating an emergency fund, or buying a car.

   

• Medium-term goals are those you might achieve in a five to 20-year time frame.
  Saving for a house deposit or creating an education fund might fall into this category.

   

• Long-term goals might include things like paying off your mortgage, making additional super contributions or investing outside your super.

When it comes to determining your goals, it’s important to set what are known as SMART goals, which means they should be:

• Specific
• Measurable
• Achievable
• Realistic
• Time-bound.

In practice, rather than aiming to “save more”, an example of a simple, short-term SMART goal might be “set up an automatic deposit of $25 a week to pay off my $1,000 credit card debt by the end of 2025”.

We know from our research that the biggest regret of people as they approach retirement is not contributing more to their retirement savings. In fact, it’s the most common reason people feel they are off-track financially, experienced by almost three in five Australians.

Using your super to save and preserve those savings for when you ultimately stop working, is a great way to help prepare financially for the long term. 

 
The earnings your super makes are generally taxed at 15%, which is lower than many people’s marginal tax rate. This means your savings are likely to compound and grow faster. 

As the earnings on your super are reinvested and taxed at a lower rate than earnings outside super, you can generate returns on your returns, leading to exponential growth over time. 

Even small, regular contributions to your super can grow significantly. It works even better if you start early and remain consistent, although there are ways to leverage the benefits of super at any age.

For example, say you decided to give up one takeaway meal a week, saving $25. If you make a $35 pre-tax voluntary contribution to your super each week (assuming a 30% tax rate this would leave you $25 less in your take-home pay), here's how it could compound and contribute meaningful amounts by the time you retire^:

• $89,980 if you start at the age of 30
• $56,622 if you start at 40
• $30,264 if you start at 50.

If you set up a salary sacrifice contribution through your employer using pre-tax income, you might not notice much difference to your take-home pay after tax is taken into account. 

If you'd like help identifying or working towards your financial goals, book a free consultation with our guidance team.

So, if you only do one thing for your financial future this month, try setting your financial goals. 

Then do one more thing each month between now and the end of the financial year to organise your finances so you’re more prepared for when you eventually stop working.  

_{* Rethinking Retirement 2025, commissioned by CFS and conducted with more than 2247 Australians from July-September 2024.} 

_{^  These calculations are based on modelling provided by moneysmart.gov.au - superannuation calculator, using the following assumptions: ages as indicated, salary $80,000PA, retirement age 65, superannuation starting balance of $65,000, employer SG plus weekly $36.76 voluntary pre-tax contribution, earning rate 7.5%, effective tax rate on investment earnings 7.0%, investment fees 0.85%, fund fees $74, insurance costs $214, 2.5% inflation, 1.5% additional rise in living standard. Tax rates applicable for the 2025-26 financial year.}