What is Retirement Planning and When Should You Start?

Whether you’re 16 or 60 years old, retirement planning isn’t just for those on the senior end. From the time you’re able to work at 16 years old – if you work more than 30 hours a week – you’re legally entitled to super from your employer. 

Fast forward five decades later, you’re comfortably retired with access to your super funds that have accumulated over the years. But how much do you actually need to retire comfortably and what does it even mean? 

In case you missed it, the Association of Superannuation Funds of Australia (AFSA) released a new report which highlighted the new benchmark of superannuation balances – specifically for homeowners – to reach a worry-free retirement by age 67. According to these new benchmarks, a single homeowner aged 67 needs a lump sum of $630,000 whereas couples need $730,000 to retire comfortably – a record-high amount. And if you’re a woman, the reality is even more stark. Women are retiring with far less super funds than their male counterparts in every age group, with the gap widening from 40 years old onwards due to care giving and income inequality. 

Below is a table of how much you need in your super funds at different ages to ensure a retirement without the financial stress. 

Source: AFSA 

What is retirement planning?

Retirement planning is the process of setting financial goals and creating a strategy to ensure you have enough money to live comfortably when you stop working. In Australia, you can legally retire whenever you want, however, if you want to access your super funds, you need to be at least 60 years old. According to the Australian Bureau of Statistics (ABS), the average age of retirement in 2024-2025 of all retirees was 57.3 years. To access the Age Pension in Australia, you must be at least 67 years old – this applies to everyone born on or after January 1, 1957. 

If you want to enjoy your golden years on your terms, it’s vital to start acting and planning today for a sustainable retirement. 

The key elements of retirement planning include: 

• Saving and investing

• Estimating future needs e.g. healthcare costs and living expenses in retirement 

• Income sources e.g. personal savings and investments, rental or passive income and pension

• Timeline and goals e.g. setting a target nest egg amount and deciding when you want to retire

• Risk management e.g. re-allocating assets, dealing with unexpected costs and having comprehensive insurance (health, life, car and home)

When should I start retirement planning?

You don’t need to be in your 50s to start retirement planning. In fact, the earlier the better. If you’re in your 20s, now is the perfect time to start thinking long-term, especially since compound interest makes early saving much more powerful. As the years roll on, you can increase your contributions as your income grows – ensuring higher returns, less dependence on the Age Pension, a larger balance when you retire and the option to quit work earlier than you planned. 

Regardless of your age and stage of life, retirement planning is for everybody. The most important step is to simply start – every contribution you make today brings you closer to the retirement you deserve.

See where you're at today with our free Financial Health Check here.