Many people underestimate just how much they will need in retirement, particularly as we are living longer, with the average life expectancy now at 79 and 84 for men and women respectively according to the Australian Bureau of Statistics.

Recent research by the Association of Superannuation Funds of Australia in found that singles need around $37,000 per annum to retire comfortably and couples need around $50,000.

Although superannuation is not the sole source of income for all retirees, many people simply do not realise how much is needed - particularly now when we're looking at 20 or 30 years in retirement.

The good news is that there are a number of ways to make the most of your working years and make a major difference to your final savings.

These include salary sacrificing, co-contributions and ensuring you have the right investment strategy in place.

In fact, for a person on an average wage and retiring at 60, starting salary sacrifice at 50 rather than 55 years of age could mean a difference of $155,876* in final superannuation balance at final retirement.

The need to start planning and saving early is even more important with recent changes to the aged pension.

There have been big changes in the economic environment in recent months and, coupled with the measures announced in the Federal Budget, it's a good time to reconsider wealth management strategies to make a real difference in your retirement.

*Based on assumptions in the case study below.

Salary sacrifice case study: Richard's story

Richard is a 40 year old male, with an annual income of $90,000 and a superannuation balance of $100,000.

Let's see the difference it would make to Richard's final superannuation balance if he starts salary sacrifice contributions at age 50 compared to if he starts contributing just 5 years later at age 55.

As shown from the graph above, by salary sacrificing up to the concessional contribution cap from age 50 until retirement (age 60), Richard's final superannuation balance at retirement is about $874,746.  If Richard starts at age 55, his final superannuation balance at retirement is about $718,870.  That is a difference of $155,876 in final superannuation balance at final retirement.

Not only will Richard have $155,876 more in retirement by salary sacrificing up to the concessional contribution cap from age 50 until retirement (age 60), after allowing for the contribution tax within superannuation, he will also have a net tax savings of about $85,820.  By salary sacrificing from age 55 until retirement (age 60), after allowing for the contribution tax within superannuation, the net tax savings would be about $51,529.

Based on certain assumptions (hyperlink to the assumptions below), if these assumptions change results may differ.