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When it comes to planning for your retirement, you need to start when you’re young. That’s why it’s called investing for retirement – it’s something that you work for years to achieve before you reap the benefits. However, there are two questions that commonly arise:

1.    When should you start planning for retirement?

2.    How much do you need for retirement?

When Do You Start?

The simple answer is: as soon as possible. When you start earning a salary, it’s recommended that you start putting money away immediately. Remember the story about the tortoise and the hare? The tortoise beat the hare in a race because the hare did nothing and relaxed for hours. Meanwhile, the tortoise made slow and steady progress – and won the race. If you spend too much time putting your retirement savings off, it might be too late when you start.

How Much Do You Need?

Answering the question of how much you need for retirement requires you to do some calculations. First, ask yourself what standard of living you expect. Do you want to move to a smaller home? Will you want to travel abroad once a year, or do you want to be able to visit your kids in another state over Christmas and for their birthdays?

Next, estimate your expenses during retirement. Remember to factor out certain expenses that won’t be relevant by that time – for example, will your mortgage be paid for? Will you be living somewhere more affordable? If you’re paying school tuition now, you won’t have to factor in that expense at a later stage.

Your expenses should include enough money to maintain your home, health insurance and medication, travel expenses, basic living necessities such as clothing and food, utility bills, hobbies, and entertainment. You can calculate it annually, to give you a lump sum of how much you need for retirement per year, or monthly if that’s easier for you. Lastly, add inflation costs to your calculations.

Investing for your retirement might be a pain in the neck now, but you’ll be happy to have put in the effort when you’re living out your dream lifestyle. Start as soon as possible, calculate realistic expenses and remember, be the tortoise!


Contact us

50 Junction St Nowra, NSW 2541 Ph: 0411 635 164 Fax: 02 4403 0574 info@puddle2pond.com.au Planners: Amanda Pond
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This website contains general information only. It does not take into account your objectives, financial situation or needs. Please consider the appropriateness of the information in light of your personal circumstances.

Puddle 2 Pond Financial Pty Limited, ABN 14 159 325 603, is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited, Australian Financial Services Licensee and Australian Credit Licensee.

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