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For most people, the retirement pension does not, and will not, provide sufficient income for a comfortable retirement. Successive governments have made it clear that private provision for retirement is now essential. Therefore, throughout your working life – starting as early as possible – you will need to build the resources necessary to provide an adequate income in retirement. As a rough guide, to maintain your current lifestyle in retirement you will need an annual income equivalent to 60 – 80 per cent of your current income requirement.

You need to plan how you will build up a fund capable of generating this level of income once the flow of income from your employment comes to an end.

As you can see, when planning funds for your retirement you need to consider:
• The advantages of being in a company or personal supernanuation plan
• The importance of saving in parallel with your superannuation fund to create an additional fund of 100 per cent accessible cash in addition to the funds locked up in the superannuation plan
• The need to achieve an appropriate balance between high risk/high return and low risk/low return investment and savings vehicles.

If you are in business you should consider how you will realise the value of your business when you retire. Do you have a plan for optimising the business succession within the family? Do you have a contingency plan if you are taken ill and can no longer run the business? Once you have considered all these planning points you will be in a better position to estimate your income in retirement and consider whether or not it will be adequate.