Team Intello
Team Intello

When is the right time to start planning for retirement?

There is no magic number to start planning but the simple answer is, the earlier you start, the more chance you have to achieve the retirement that you dream of having.

The reason for this is because of the compounding interest effect. Below are some simple graphs showing how powerful this effect can be.

The first graph shows a beginning balance of $25,000 and rate of return of 6%, with no extra payments. Starting at age 25, by age 65 the balance has grown to over $257,000. If you delay the start by 10 years, the end balance is $143,500.


If you wanted to have $1 million at retirement age 65, the graph below shows how much you would have to save every month, using a 6% return, at different starting ages.


The table shows the amount that would have been personally contributed over the time to retirement and the compounded interest amount.


So what can you do to help achieve your retirement goals?

One of the easiest and tax-effective ways is through our superannuation. There is already a requirement for your employer to contribute 9.5% into super for you but you can add extra funds by either a non-concessional contribution (after-tax money) or by a concessional contribution (pre-tax money), salary sacrificing. Of course, if you’re looking for a more personal and customised service, our SMSF Administration team would be more than happy to assist you.


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