5 steps to make the most of your investment

The investment steps you take today will have a huge impact on the type of lifestyle you lead in the future. While retirement may seem far away, it is never too early to start thinking about maximising your investment.

Step 1 - Set your goals

First, you need a clear understanding of your retirement goals. Whether you are relaxing at the beach, travelling or starting up a small business, you need to ensure that when you get to retirement, your means match your dreams.

Step 2 - Estimate how much income you will need

As a general rule, experts say you will need between 60% and 80% of your final annual salary to maintain your current lifestyle in retirement. You can use this percentage as a quick gauge, but it's worth calculating estimated costs to make sure you take your personal circumstances into account. Do not forget to include inflation when estimating how much things will cost in the future.

Step 3 - Turn your estimated income into a lump sum goal

Once you know the annual income you need, how much do you need to save? As you can see from the example below, the more income you need (and the earlier you want to retire), the more capital you need to maintain the same level of income.

Take a look at the money you will need to meet some standard retirement incomes.

The table below indicates the lump sum required to provide different levels of income at different ages, but it is to be used as a guide only, because everyone's individual circumstances are different.

Retirement Age Net annual income of $20,000 requires a lump sum of Net annual income of $30,000 requires a lump sum of Net annual income of $50,000 requires a lump sum of
55 $364,400 $548,750 $921,050
60 $328,650 $493,000 $821,550
65 $285,300 $427,950 $713,250

Source: Telstra Super Financial Planning

Step 4 - Start your investment and saving plan

Now that you know your retirement goals and have estimated how much money you will need, it is time to save and invest.


Saving even small amounts can make a big difference to the way your savings grow over time. As a member of Telstra Super, you may make regular or one-off contributions and you would be surprised at what a difference this can make. Even saving $15, $20 or $30 each week over a 30 year period could make a huge difference.

Savings over time graph
Source: Telstra Super Financial Planning Pty Ltd. Assumes interest rate of 7% pa; not discounted to today's dollars; based on constant contributions of $15, $20 or $30 per week; future performance is not guaranteed.


Investment returns can also have a major impact on your savings. A difference of just 1% in returns may have a significant affect on your final retirement balance.

There is a trade off when considering higher investment return which is the higher risk of negative returns. The level of risk you are prepared to take depends on your personal circumstances.

Step 5 - monitor and review your plan

Once you have worked out what your plan is, make sure you keep track of it. Monitor the progress of your savings and the performance of your investment.

If your circumstances change, you may need to review your plan and make adjustments to ensure that your goals can still be met. You may like to consider obtaining financial advice through Telstra Super Financial Planning. To discuss your advice needs, call us on 1300 033 166.