How should I save for retirement?

After financially navigating the pandemic, I’m concerned that I’m not saving enough for my retirement. How much should I be saving?

Name withheld

Nirdev Desai, the national head of sales at PSG Wealth, responds: Accumulating wealth starts with a conscious decision to change your approach to your finances. You will need to start saving with a purpose, by setting financial goals. Crucially, you need to realise that successful saving and investing is a multi-decade journey. The road to financial wealth is one of dedication, persistence and hard work.

The average age of a dollar millionaire is 61 (source: Fidelity Investments). Achieving wealth is going to be hard, and needs the commitment of long enough time, and regular and meaningful contributions into appropriate growth-biased portfolios, and once wealth is achieved, sustainable income management of your accumulated wealth.

While it is tough, anyone can achieve it. Author Thomas Corley argued that self-made millionaires are due to what he called “rich habits”, saying that it’s a behavioural choice. Corley’s research also shows millionaires can be evenly split into two groups: saver-investors, the typical employee who diligently saves (typically about 20% of gross income) over their whole working career, and the dreamerentrepreneurs, who build wealth through taking risks.

Whichever group you belong to, engaging a financial planner will help you to clarify your financial goals, and assist in putting a sustainable plan in place to get you on the road to wealth.