Saving for retirement is a wide reaching concept and few of us actually have a plan or understanding of how to achieve this.

Before we introduce the four phases of saving for retirement, it is important to illustrate that the earlier you start the better off you’ll be.

Let’s say you saved and invested $10,000 each year for 10 years (saved $100,000 total) and then nothing further for 20 years. Assuming earnings of 7% net of taxes and fees, at the end of those 30 years you would have $553,366.

If alternatively you waited until year 11 and then saved $10,000 for each of the next 20 years (saved $200,000 total), at the end of those 30 years you would have just $424,303, far less. It is evident that due to the compounding effect on returns, starting as early as possible will provide much better long term results.

We have found there are actually four main phases of saving for retirement. These are:

  1. ‘Establishment’– Ages 20-35

The early part of your career should be focussed on investing in yourself, to increase your own earning’s ability. By increasing your income at work or in your own business, this will increase your ability to actually be able to save and build a portfolio in the future. You should still be looking to save now and pay off your home loan / build up an investment portfolio, but greater savings will incur as your income rises.

  1. ‘Building’– Ages 35-45

Once your income has risen and your living needs are being met, you should be able to save much more. ‘Building’ a portfolio may include simply paying down your mortgage as fast as you can, investing personally or through a family trust, or salary sacrificing to super. For those with children, the additional cost will obviously slow down this process but should not stop it altogether.

  1. ‘Maximisation’ – Ages 45-55

By now you should be aiming to be debt free and really starting to maximise your already strong portfolio balance. After a number of years of saving, your retirement portfolio will reach a point where the earnings within the portfolio are greater than your own savings.

  1. ‘Financial Independence’ – Ages 55+

At this stage you should be targeting a large enough savings pool that you have the ability to retire or reduce working days at your leisure. It is important however that your portfolio is at least somewhat protected from market turbulences such as another GFC, whilst maintaining enough growth investments to support you through hopefully 30 plus years of retirement.

As you can see, saving for retirement is a complicated process, but if you can focus on these stages of establishing your career, building your portfolio, maximising your portfolio and then maintaining it through financial independence, you should be on the right path.

If you have any questions about your wealth accumulation please feel free to contact me at or call (08) 8409 4333.

Andrew Barlow NEW 5


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Andrew is a Wealth Advisor at William Buck, combining his friendly nature and technical skill to achieve great results for his clients in their personal wealth strategies. His two greatest passions are finance and the Adelaide Crows.