Retirement is one of the most uncertain times in a persons life when it comes to finances. For this reason, proper retirement planning is needed long in advance. Below is a spreadsheet (give it a chance to load) where you can determine whether your current level of savings will be sufficient to last you during your retirement.
To complete the spreadsheet fill in the light blue cells (if you are not sure what is required, look lower down for instructions). Look at the summarized results and scroll across to see the detailed calculations. To see what happens when you change some of the key inputs and compare the results as you change the inputs. Inputs that are useful to vary are your planned retirement age and the percentage of income that goes into savings.
Look at the results to see whether you will have enough saved for your retirement. If you are short, increase your retirement age and/ or the savings % until the savings are adequate.
Some general tips about saving and planning for retirement.
Firstly, it is critical that you know what is required. The spreadsheet above is a high level view and cannot be relied upon. Get your investment advisor to perform a more detailed calculation.
Secondly, once you know what is required, make a plan. Get investment advice and make sure that you are putting enough away in the correct investment products. Do not deviate from this plan and make sure that as your income increases, your saving does to!
Thirdly, you should never be in a position to just walk into a shop and buy something. Force yourself to always think whether you actually need it/ can afford it. The best way to achieve this is to work out a budget for yourself and anything left over is taken out of your account into savings AT THE BEGINNING OF THE MONTH!
That way the temptation is gone and any deviation from your budget will need careful consideration.
Stick to this plan and let the power of compounding investment returns make sure you retire with enough money to maintain your lifestyle.
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