3 money mistakes people make in their 40s

Key learnings covered in this topic

1. Having the right type and amount of insurance is important to protect you and your loved ones. 
2. Taking advantage of tax incentives in super may benefit you now and in retirement. 
3. Using superannuation to gain an understanding around how investment markets work can benefit your future. 

The financial whirlwind of your 20s and 30s is behind you, and you’ve come out the other side learning a few things about money. But life is still busy, and it’s easy to overlook some financial essentials for this particular stage in your life. Let’s have a look at the most common money mistakes people make in their 40s.

Money mistake #1 Not taking insurance seriously

By the time people hit their 40’s they’ve usually accumulated some financial assets, and perhaps a family, that they need to protect. If you were sick or injured yourself, how would you pay the bills? And if you passed away, would your family be taken care of? These questions are why insurance should be top of mind at this age.

The solution – take some easy steps to properly protect yourself

To make sure you’re adequately protected a good first step is to check your super account to see what insurance you hold there. This amount can be amended to better safeguard your assets and your loved ones, or you can apply for new cover.

Holding insurance in super often means less health checks, it could be more cost effective as the fees are paid from your super balance rather than your pocket, and it’s often cheaper as the insurance policies can be bought in bulk.

To get started simply give us a call on 1300 360 149 and we can discuss your insurance needs with you. If you decide to move ahead and apply for insurance, you can do so in MemberOnline (if eligible) or by completing and returning the relevant form. 

Money mistake #2 Not taking advantage of tax incentives in superannuation

You may be a while off retirement, but it’s not too early to be thinking seriously about your superannuation balance. Superannuation is generally taxed at a lower rate than other investments or savings, and understanding how tax incentives work within super is important to ensure you don’t pay more than necessary.

The solution – Make your money work for you not the tax man  

If you put extra in your super now you’ll have years to benefit from tax incentives offered through salary sacrificing, after tax contributions, and spouse contributions.

With the increasing cost of living you may not have much to spare, but even small amounts can take the pressure off accumulating a comfortable balance later in life. 

If you’re not sure of what tax incentives apply to you then give us a call on 1300 360 149 and we can work out how much you could save. 

Have a look at how a 40 year old Erin improved her retirement savings by $140,000

Money mistake #3 Not being confident enough to invest

Being financially confident and understanding how investment markets work can really change your financial future. Many people are not sure where to start when it comes to investing, but the good news is you don’t have to dive right in. 

The solution – Learn the investment fundamentals through your super

You can start your investment education by looking at how your super is set up. As a first step, learn how the investment options managed by the Care Super experts are constructed with different growth and defensive assets to suit a variety of risk tolerances and expected investment returns.

And then for more hands on learning, you can investigate the Direct Investment option (DIO). This option lets you take the reins and largely self-manage your super portfolio. You make the decisions on what to buy and sell from of a range of shares, exchange traded funds (ETFs), listed investment companies and term deposits, in combination with a CareSuper managed option/s. 

You’re in control of your super, and by learning by doing you can build up your investment knowledge and passion for wealth creation.

At no extra cost the financial planners at CareSuper can help you to learn the investment fundamentals. It’s all part of your membership so get started and call us on 1300 360 149.

Information correct as at 19 April 2024.