How good credit is integral to your retirement

More and more Australians are beginning to realise that state-provided superannuation payments are unlike to cover the lifestyle that they want to have post-retirement. With a single person needing about $24,000 a year to live a comfortable retirement, according to the Association of Superannuation Funds Australia¹, there are only two obvious solutions to ensuring a solid last few decades: working longer, or earning more.

Many Australians are choosing to do the former, with the Australian Bureau of Statistics reporting that there has been a significant increase in the proportion of people choosing to continue working in their 70s². However, plenty are choosing the other option: earning more by expanding incoming revenue streams.

Property

Property investment is a great way to earn income after you retire. If you use a property manager and other real estate professionals, property investment can require very little input from the actual investor, other than the capital.

But in order to get that funding, you need to have a good credit profile. A lifetime of solid mortgage repayments and good credit behaviour can earn you big points with the lenders. You do, however, have to make sure that you don't leave this too late in your life: mortgages nowadays are often paid over several decades, and that's time that retirees may simply not have.

Start with checking your Equifax credit report and getting a feel for your credit history and the information lenders can see from Equifax. Good credit could be the key to gaining a retirement income through property investment.

Business

However, others steer clear of the residential property market and instead choose to spend their time post-retirement starting, running or otherwise managing their own business. The 2015-2016 Global Entrepreneurship Monitor has shown that this is actually quite a popular idea among those nearing retirement age, with people from 55-64 having high representation in early entrepreneurship stages of business³.

Much like residential property, business investment does not need a direct hand from the investor to provide income. However, again like residential property, you'll need capital to get started as well as keeping your business afloat. Your enterprise may have its own Equifax business credit report, which you should periodically check to ensure you are keeping up with all of your obligations and ensuring your investments and your retirement remain happy and healthy.

A good credit profile is one key to ensuring you live a comfortable retirement, while planning ahead is yet another one. You can get a head start on your retirement plan no matter how old you are by checking your Equifax credit report and ensuring that it is and remains healthy.

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.​

¹The Association of Superannuation Funds of Australia, ASFA Retirement Standards. Accessed April 2016.

²Australian Bureau of Statistics, Retirement and Retirement Intentions July 2014 to June 2015. Accessed April 2016.

³Global Entrepreneurship Research Association, Global Entrepreneurship Monitor 2015/2016. Accessed April 2016.