Recognition that they will not have enough is at least the first step. The harder part is doing something about it.

Reluctance could also be because the solution means cutting back on spending now in order to have more income in retirement. The answer is boring, but it works. It is to salary sacrifice a set amount of money from each pay packet into super.

Over time, it makes a big difference to the standard of living in retirement.

My favourite retirement planner is the one provided by ASIC on its MoneySmart website at moneysmart.gov.au. If you have never had a look at it, you should.

It shows not only how much income your super balance is likely to generate in retirement, but what actions can be taken to grow the super balance and increase retirement income. The planner has ”defaults” on super fund earning rates, etc.

But these assumptions can be tweaked to account for personal circumstances.

By playing with the numbers you should quickly get a handle on how you are tracking for retirement. Importantly, the planner takes into account any age pension that the retiree would likely receive. It shows the power of salary sacrificing.

Let’s assume two 50-year-old home-owners, who want to retire at age 65, each have $150,000 in super and each earns $80,000 a year. The MoneySmart planner shows the couple can expect a retirement income, including a part age pension, of $50,000 a year until age 90, after which time their income drops back to the age pension of $31,000. Now, let’s put into the calculator that the pair each salary sacrifice $200 a fortnight into their super.

Their retirement income rises to almost $55,000 until age 90. That is almost the $56,000 a year suggested by the ASFA Retirement Standard as the income needed to fund a ”comfortable” retirement. It may seem that salary sacrificing $400 between them each fortnight is a big ask. But it does not mean a reduction in their take-home pay of $400 a fortnight.

By salary sacrificing, the 34 per cent that would have been paid in income tax is replaced by the 15 per cent super contributions tax. Using current income tax rates, the couple’s marginal rate, plus Medicare, is 34 cents in the dollar. So their combined fortnightly take-home pay is reduced by $264.