Caroline's story: how she retired early

We met with Caroline who retired comfortably at 50! For most, this is a dream. So we asked her for her story to let others know that this is do-able.

Caroline achieved something most people consider a dream - retire comfortably and early at the age of 50. We asked her to share her story and show how this is a reachable goal. In this first article, we’ll get to know a little bit about Caroline and what motivated her to grow her super. We also asked for her tips and advice on how to save, budget, and grow your super, which we will share with you in a future article. The interview below has been edited for length.

At what age did you start caring about your superannuation?

I didn’t start thinking about the importance or value of superannuation until I was nearly 30. I look back now and think how much more I would have if I had started thinking about it earlier.

After my husband Mark* was accepted into a master’s degree, we moved to Canberra and I found a job on a basic wage. I was 27 and the main breadwinner. Superannuation was the last thing on my mind. Instead, I was desperate to buy a house.

When I was 29, I joined the public service and for the first time someone took the time to discuss superannuation with me. It was the matched contribution offer that made me sit up and pay attention. My head started saying, “Free money for later.”

I was doing everything I could to save money for a house. My heart was begging me to choose the lowest option and keep saving for that house. My head started saying ‘free money for later’. My head won. I still don’t know why. I think subconsciously it made financial sense.

I took out the highest option possible, choosing to contribute 10% of my own salary into super on top of the superannuation guarantee amount. My employer then matched with an extra 5%. I knew I could reduce it down if I ever needed to, but I never did. Every time we hit a financial pressure point, I cut back on something else.

I believe that if the Human Resources Officer had not taken the time to talk me through the options, the system, how it worked, and what it meant, I would never have started to think about superannuation as a means to achieving financial independence.

For the next 20 years I spoke with many colleagues, all of whom had simply ticked the box and chosen the minimum contribution option. In their view there were too many other things to spend money on now and retirement was a long way away.

What made you start thinking about how important it is to contribute to your super?

This will sound odd, but I started thinking about how important my super was out of jealousy.

There was a strange revolving door where I worked. Older officers would retire at the golden age of 54 years and 11 months, only to turn up again in the workforce six months to a year later. I was jealous of their ‘early’ retirement scheme, having joined the public service after it was disbanded.

Yet it got me thinking: Why were they coming back? For many it was financial. They simply could not afford to do what they wanted to do in retirement and they had many years ahead of them.

I learned two things from this:

  • I had to pay for my retirement while I was working. This wasn’t like a mortgage where I could borrow and then pay it off. It was the reverse. It had to be paid in advance.
  • Unless I knew what I wanted to do during my retirement I wouldn’t know how much I needed to have, and I would end up as the walking dead, returning to work, lost, not knowing how to do anything else.

“Superannuation was the last thing on my mind. Instead, I was desperate to buy a house...”

Did you set goals or milestones for your super?

From then on, it was my goal to put as much into my super and my mortgage as I could.

Every time our superannuation statements turned up we would sit and compare them. My husband had taken the lowest contribution option when he joined the public service four months after me. It was very obvious that my superannuation was outstripping his, yet it still took me two years to convince him to increase his contribution levels.

It then became almost a competition to see how much we were earning. We each started putting in as much as we could. We also started talking about what we wanted to do when we retired and once we had hammered that out, we started organising for it, not just saving for it. Having a very clear vision of our lives after work made it so much easier to save instead of spending.

My father always said that if there are two incomes in the household, learn to live off one and save the other, because sooner or later you’ll find there are times when you only have one income. It was good advice. As soon as we were both working half our incomes went into savings, mortgage and super.

*Names have been changed to protect anonymity.

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All information provided in the magazine is sourced from independent writers & may contain general advice that is not endorsed by the FairVine Super Plan.