Five ways to get your financial goals back on track in 2025

Two in five Australians are not on track to meet their long-term financial goals, according to new research from Colonial First State (CFS). The primary reason? Struggling to save money.

For 75% of Australians, the high cost of living is their greatest concern. And while interest rates have remained stable over 2024, they have also remained higher for longer than many expected. Against this backdrop, 38% of Australians admit they are not on track to meet their long-term financial goals.

If money worries are on your mind, try implementing these practical steps to make 2025 the year you get back on track:

1. Get clear on your goals (and your expenses)

Almost three in five people say the reason they are off track is because they just can't seem to save any money. The solution to this is working out how much you can set aside each payday. Even a small amount saved will build over time, provided you are consistent and commit to saving it.

The government's Moneysmart website has some great calculators to help you set some savings goals. It also has an excellent budget planner to help you manage your expenses in the new year.

2. Use tax benefits to boost your retirement savings

Your employer contributes an amount equivalent to 11.5% of your pre-tax salary or wages into your super fund, which will increase to 12% from July 1, 2025. This helps you save for the long term. By salary sacrificing a bit extra from your pre-tax pay into your super, you can catch up on your long-term saving goals.

You can arrange for your employer to make additional super contributions on your behalf. These salary sacrifice contributions are generally taxed at only 15% (unless you earn over $250,000 a year), making them a very tax-effective way of saving.

Salary sacrifice is a recurring arrangement, so your employer will continue making the additional contributions until you ask them to stop. This can be a great way to save money for the long term, potentially without noticing it as much. For example, one strategy might be to revisit the government's recent Stage 3 tax cuts and ask your employer to salary sacrifice any additional take-home pay into your super.

3. Take advantage of unused carry-forward contributions

You may be eligible to contribute more than $30,000 at the 15% tax rate through carry-forward contributions if you have contributed less than your cap limit into super in any of the previous five financial years. This can be particularly beneficial if you have taken time out of the workforce, such as to care for a relative or due to ill health.

However, this option is only available if your total superannuation balance was less than $500,000 on June 30 of the previous financial year. To make this strategy effective, you also need to have sufficient taxable income.

4. Consider special provisions if you're approaching retirement

Even if you're older, there are options available to help you get your finances back on track for the long term, especially when you reduce your working hours or stop working altogether. These options include:

• Downsizer contribution: From the age of 55, you may be eligible to make a downsizer contribution of up to $300,000 to your super using the proceeds from the sale of your home. If you decide to sell and downsize into a smaller, more manageable property, this could provide an opportunity to top up your super tax-free, and you can also withdraw it tax-free later on. Both members of a couple can take advantage of this, making a total of $600,000 that can be contributed to super. Keep in mind that the Association of Superannuation Funds of Australia recommends a super balance of $690,000 per couple or $595,000 for a single person, so depending on your goals, this option could get you close.
• Transition to retirement (TTR): If you've turned 60 but haven't yet retired, it may be worth considering a TTR pension. This enables you to work full-time, withdraw up to 10% of your TTR pension account as a tax-free income stream, and continue to contribute to your super. TTR income stream payments can provide you with more cash flow to make additional contributions to super, such as salary sacrifice or personal contributions. This can boost your super tax-effectively if the contributions are higher than what you're drawing from the pension.

5. Get professional advice

Financial advice can be a game-changer. Our research shows that people who have received financial advice feel significantly more confident about managing their finances, ensuring they have enough money when they stop working, and achieving their financial goals.

For ongoing financial advice, it might be worth consulting a financial adviser. It's also important to note that the fees you pay for financial advice may be tax deductible, especially if they relate to managing your tax (such as salary sacrifice) or income-producing investments held outside your super. If the advice pertains to your super, you can also deduct the cost from your super balance.

If your financial needs are relatively straightforward, other advice options are available. For specific issues, you can seek one-off financial advice on topics such as managing debt or maximizing your super.

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