For how long must I save to provide an appropriate retirement benefit?

An amount of 15 times annual salary at date of retirement is required on retirement to purchase an annuity. 15 times annual salary is normally sufficient to purchase an annuity of 75% of salary which increases with inflation each year and is payable for life.

The conclusion is that the biggest contributor to a successful retirement is time. The trick is not to waste the time. Waste comes in the form of early withdrawal and then spending the monies on non-retirement funding as well as inappropriate monitoring. The second biggest contributor is the investment returns earned over the time that you save. It is clear that a conservative investment (the inflation plus 3% assumption) takes a much longer time to accumulate to an acceptable level of savings. The other big factor is the amount of contributions. All in all the message is start saving when you start working and don’t stop until you stop working. There is no easy way out.

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