Work out how much you'll need

When you retire from full-time work, you'll need enough money to live at the standard you want for the rest of your life. Start by working out a rough yearly budget.

Look at your current living expenses and work out how they would change if you retired.

Your housing costs will be very different if you expect to have paid off your mortgage by retirement. If you have children, will they need financial help from you after you retire?

As well as ongoing living expenses, it also pays to plan for occasional one-off expenses.

You may be thinking about spoiling yourself or your family after you retire. Some people may want to make the most of their new-found freedom by taking a holiday overseas or a trip around Australia. Others may want to treat themselves to a new car. If you have goals like these, include them in your plans as the first step towards achieving them.

You will also need to plan for more mundane but necessary expenses such as repairs to your home or replacing your appliances as they wear out.