The key to life is living, not retiring, but there may come a time in your life when you want to change what you’ve been doing and either stop working completely, or take a long holiday and work out what’s next.

To be able to have this choice though, it’s imperative that you plan ahead, even if you think retirement is for everyone else.

As a rule of thumb, it is suggested people should aim for a retirement income of between 50% and 70% of pre-retirement salary/wages. Based on this premise, it is estimated you will need to save around 15% of your income for 40 years. The problem here is that your employer is only compelled to provide superannuation contributions for you at the current rate of 9.5% of your income per annum.

How might this be done? You can start contributing to super earlier in your working life, raise the combined rate of your super contributions to 15% by making personal contributions (keeping under the annual limits of course), and take heed of the following tips throughout your working life.

Young, single and independent

• Retirement is something your parents are doing but starting small and early lays the foundations for future choices.
• Maximise your government co-contributions—they can potentially add thousands to your super.
• If appropriate, take out disability insurance through your super fund. It is often the cheapest and most tax-effective way of providing insurance cover.
• Choose an investment strategy that suits your long-term risk profile.

A family and a mortgage

• Your focus may be on repaying the home loan, but don’t forget your super entirely.
• A mortgage and young children mean insurance is a top priority. Taking out life and disability insurance can be a sound decision at this stage.
• Check eligibility for a tax offset on spouse superannuation contributions and government co-contributions.
• Review your investment strategy and risk profile.

The “in between” years

• A higher income and a smaller mortgage open up the opportunity to boost your super but take care not to exceed contribution and balance limits.
• Find out if salary sacrifice could boost your super savings. 
• Review your insurance cover and investment risk profile.

Retirement is looming (maybe)

• Over 55s enjoy some good incentives to contribute to superannuation but keep an eye on your total balance.
• Consider combining salary sacrifice with a transition to retirement pension if beneficial.
• Review your insurance cover, investment strategy and risk profile.
• Start comprehensive retirement planning or a new career focus.

Down tools or start anew

• You’ve made it. For retirees over 60, withdrawals and pension payments are tax free!
• Review your investment risk. Keep enough growth in your portfolio to ensure your money lasts as long as you do.
• Review your insurance.
• Stay active and enjoy life – or launch into your next career. There are no rules!

Remember, it’s never too late – or early – to start…