Retirement Planning - So, you think you're saving enough?… When it comes to investing your hard-earned dollars, you have to decide how much you want to invest and where to invest it. To choose wisely, you need to know what choices you have and the risks associated with the investments you choose. There are four basic investment categories: shares, property, fixed interest and cash. You can invest directly in any or all of them, or indirectly, by buying managed funds. There are many different ways (vehicles) to invest in these asset classes. For example, if you are saving for your retirement, you can investment in these asset classes through an employer sponsored superannuation fund or by setting up your own personal or self employed super fund. Only about one-third of Australians are actually saving enough to meet their retirement goals. If you are relying purely on an age pension to fund your retirement years, get ready to take a big pay cut. Government pensions are designed to replace a minority proportion of your working income.

Personal Financial Planning - Getting Started … Investment Basics ... Creating a Financial Plan Making sense of the financial jargon … Defining the Asset Classes … 7 Golden Rules of Investing ... Retirement ... How many years are you planning for? ... How much will you need in Retirement? ...

This is why the Government introduced compulsory employer sponsored superannuation. So it is up to you to make sure you are putting enough away. The earlier you start saving … the more you will have when you get to retirement, which is not as far away as you may think it is!

Check out the following Retirement Planning Topics. This information can give you helpful answers to the questions you may have about retirement matters.

You may also want to try our retirement planning calculator, which is designed to help you determine how much you will need to live on in retirement.

Retirement … How many years are you planning for?

Today people are retiring earlier than ever before. During the 1950's, the retirement age was around 67 for men and 68 for women. However in recent years, the average age of retirement has hovered around 63. Research is indicating that the average retirement age will continue to decline as, when asked, many people say they expect to retire as early as 55 or 60. Obviously the longer you plan to spend in retirement, the more you will need to save. So, how many years should you plan for?

The answer depends largely on your life expectancy and how much you can afford to save and accumulate between now and retirement. Life expectancies are stated as statistical averages, meaning you could live more years or fewer years. While about 50% of all people could die before their life expectancy, another 50% are expected to live beyond it.

Life expectancies are on the rise

With advances in medicine and improved lifestyles, life expectancies are increasing. The Life Expectancy table below can help you determine just how mmany years you may need to plan for in retirement.

Life Expectancy

Source: Society of Actuaries Annuity 2000 Mortality Table

Since most people nowadays plan to retire between age 55 and 60 and live well into their 80's, that's up to 30 years to plan for!.

The fortune you will earn over your lifetime will astound you! …

You may not realize it, but over your lifetime you will earn a small fortune from your salary alone. The chart below gives you an idea of how much money you could earn.

Your Lifetime Earnings

This chart is a hypothetical illustration of the 10, 20 and 30 year earnings of an individual with a starting annual salary of $15,000, $20,000 or $50,000 and receiving a 3% annual salary increase.

Saving just a small portion of your earnings each month will help you to secure your financial future in retirement.

Do you know where your income will come from in retirement?

You know where your income is coming from today but do you know where it will come from in retirement? The money you live on in retirement will likely come from your super, Social Security, personal savings and or part-time work.

The amount that you need to save between now and retirement depends on what you might receive from your pension and Social Security, and what your investments could earn between now and the time you retire.

Remember … an Social Security Government age pension will not replace the majority of your income in retirement and many people feel the future of our current Social Security system is uncertain. This is why your personal savings are becoming a more important part of the retirement equation.

Our Retirement Savings Calculator can help you to work our possibly how much you may need in real terms in retirement.

Retiree income sources

Income of the Population 55 and Older, Social Security Administration, April, 1998.

Based upon U.S. statistics, this chart shows the most common sources of income for individuals age 55 and older (based on a household income of $27,944). Australian statistics do not differ greatly. This chart indicates that many retirees depend on part-time work as a major source of their retirement income. So, if you do not plan to work during your retirement, you may well need to reassess your superannuation to determine whether you are saving enough to meet your retirement objectives.