Editorial: Saving to retire a scary thought

Saving is an important priority. But the thought of saving enough for retirement is a scary one. Photo / David White

I'm a saver but the thought of saving enough for retirement is a scary one.

It's not something I often think about at this point in my life - I'm more focused on trying to buy a house.

Retirement seems so far away (I'm only 27) but, every time I am forced to think about it, I wonder how I am ever going to be able to afford it.

Retirement Commissioner Diane Maxwell spoke at the indulge Speaker Collective this week and made me think again about my retirement.

People are living longer, so retiring at 65 could mean 30 years plus of living without work for some, she said.

The pension is helpful but not really enough to live on. On top of that, I'm doubtful there will even be a government funded superannuation scheme by the time I retire.

As Ms Maxwell pointed out, it's all about starting early. Starting now.

Even putting a small amount aside each week adds up.

It's the idea of compounding interest. As Ms Maxwell explained, money makes more money and then that extra money makes even more.

It is simple but it still seems impossible to do that when you're looking at spending half a million dollars on a house, which you will be paying off for the next 20 years at least.

Ms Maxwell had other good advice for how to save for retirement.

She said she often "bought" luxuries for her retired self.

When she was considering buying a bottle of wine, she would sometimes decide instead to forgo it and "buy" it for her 80-year-old self. By not spending the money then she would have enough to buy that bottle of wine when she was retired.

It's a good way to look at it. Instead of feeling hard done by, you're just saving it for later on.

Despite Ms Maxwell's sage advice, the thought of saving for retirement is still a scary one but it has prompted me to start looking into investing some money in something that might make a better return, instead of just being happy with earning interest from my savings account.

It's definitely food for thought.

Now I just need to make the time to do something about it.