When should you start retirement planning? Why starting before 40 can make a big difference

ARTICLE

16 September 2026

4 min read

By Mark Osborne, Senior Financial Planner

Is 40 too young to start thinking about life after work? Absolutely not! In fact, starting your retirement planning sooner can give you more options, greater flexibility and potentially, a more comfortable retirement.

Most Australians will ask themselves these questions at some point: Will I have enough money to retire comfortably? And what lifestyle will I be able to enjoy when I stop working?

While retirement may feel a long way off, starting early can help you make the most of the opportunities available to you. There’s plenty of advice and support available, but understanding what you want your future to look like is an important first step.

Retirement planning: key takeaways at a glance

When should you start retirement planning?

As early as possible. Starting in your 20s or 30s gives compound growth more time to work, but beginning in your 40s can still significantly improve retirement outcomes.

How much super do Australians need to retire comfortably?

According to ASFA's June 2026 Retirement Standard, a couple may need around $730,000 in super to support a comfortable retirement lifestyle.

Can you retire comfortably if you start planning at 40?

Yes. Increasing super contributions, reviewing investments and creating a retirement strategy can help many Australians reach their retirement goals even if they begin later.

Let’s tease this out further. What your retirement looks like depends on you – what you want and what steps you take now towards that goal.

How do I start retirement planning?

This is a good opportunity to pause and consider what life after work might look like. What's on your bucket list? What goals or experiences would you like to pursue? If you have a partner, what are their aspirations for the future?

Once you have a clear picture of what your retirement looks like, you can start thinking about how much income you'll need to fund it – and that’s where a financial planner can put the structures in place to achieve that goal.

People in their 20s and 30s, for example, might need to balance additional superannuation contributions against saving to enter the property market.

Then in your 30s and 40s, you may be building a family, you might have a mortgage and you’re paying it off, you’re putting your head down at work and moving into more senior roles. It’s the busiest time of your life, so you want to make sure you’ve got things structured appropriately for the longer term and working as efficiently as possible.

How much money do you need to retire in Australia?

The Association of Superannuation Funds of Australia (ASFA), the body representing Australia’s superannuation industry, publishes a ‘Retirement Standard’ which it updates regularly. ASFA estimates the amount of super and retirement income needed by couples and singles, and for comfortable vs modest standards of living.

For example, as at June quarter 2026, ASFA’s estimate (which assumes the retiree/s own their own home) for a single person living modestly is $36,548 a year. For a couple with a comfortable standard of living it’s $78,998 a year.

When it comes to the total amount of super you’ll need to save before you retire at age 67, ASFA advises that a couple looking to maintain a comfortable retirement lifestyle will need $730,000. At the other end of the scale, a single person living modestly will have most of their needs covered by the Age Pension system, so will only need about $110,000.

That seems clear enough but, while standards are a good starting point, they don’t capture the nuances of real life. That’s where financial planners come in.

How much super should I have?

Good news, you don’t need to have a seven-figure superannuation balance at retirement.

One of the things that I think is really daunting for people is reading in the media: ‘Hey, look, you need a million dollars in retirement’. People hear that, and they get completely overwhelmed. Instead, focus on mapping out the lifestyle you want in retirement and then figure out the income you will need to support that.

At its simplest, the superannuation industry often says that you should aim to maintain an income, or a spending level, at about two-thirds of your pre-retirement salary.

ASFA has a handy online calculator to estimate how much super you should have today, based on your age. Moneysmart also offers a free online retirement calculator.

Steps to improve your retirement savings

If you feel your financial situation is working against your retirement plans, sitting down and putting your finances in order goes a long way to achieving a sense of control.

Investment mix: Your super should be invested in accordance with your risk tolerance, investment preferences, and your ethical and social preferences. You can really tailor it to who you are as a person, what you want to achieve in life, and make sure that it’s working for you. And the sooner you do that, the more time you’ve got for that strategy to work.
Consolidate: If you’ve got multiple super accounts, it’s worth looking to roll them into one because you’re paying fees on every account which erodes your savings.
Top up with voluntary contributions: Regular voluntary super contributions – even if it’s just a small amount - can significantly increase your retirement savings through the power of compound growth over time.

Following that, it’s about knowing your goals and setting up plans to achieve them.

There’s a lot of psychology involved in financial planning – just helping people to make good, confident decisions. I firmly believe that with the right planning and financial advice, even if you start without a strong base of assets in your 40s or 50s, it’s possible to set and achieve a goal of retiring comfortably, ready to enjoy your post-work dreams.

Mark Osborne

Mark is a Senior Financial Planner with more than 17 years' experience. Beginning his advice career during the Global Financial Crisis in 2008, he has helped clients navigate financial decisions with confidence through a variety of market conditions. Over that time, he has guided clients through significant changes to superannuation, legislation and financial markets, shaping his practical and client-focused approach to advice. Mark holds a Master of Financial Planning and specialises in superannuation, retirement planning, investments and personal insurance.

Additional reading

How much do I need to retire? What benchmark numbers don’t tell you

Understanding superannuation jargon

Disclaimer:
Copyright © 2026 AIA Financial Services Pty Limited (ABN 68 008 540 252, AFSL 231109), trading as AIA Financial Wellbeing. All rights reserved. This information is current at the date of this publication and is subject to change. This provides general information only, without taking into account factors like the objectives, financial situations, needs or personal circumstances of any individual and is not intended to be financial, legal, tax, health, medical, nutritional or other advice. Before acting on the information in this publication, individuals should consider its appropriateness having regard to such factors.