The limitation is that many calculators often can't handle more complicated goals.

For instance: “Can I go part-time at 55, retire at 60, spend more between 60 and 75, then reduce my spending after that?”

That's harder to model with a standard online calculator.

Option #3: Work with a financial adviser

A financial adviser can take your goals and build a financial plan around them.

But not every financial adviser uses the same retirement planning tools. So it's worth asking how much detail their modelling allows.

Ask them if they can:

• model different retirement dates for you and your partner?
• Can they show what happens if you go part-time?
• Can they change your spending at different stages of retirement?

Remember the more specific you are, the more useful that plan becomes.

Step 3: Work out whether you're currently on track

Now you know two things:

1. Where you want to go.
2. how much money you'll need to get there.

Next, you need to ask: “Based on what I'm doing today, am I actually going to get there?”

Let's say you've calculated that you'll need $1 million in investments by the time you retire.

Based on your current KiwiSaver, investments and savings, perhaps you're on track to have $700,000.

That leaves you with a $300,000 wealth gap.

A wealth gap is a gap between the amount of money you're on track to have in retirement ... and the amount of money you need to fund the retirement you want.

That's the amount your financial plan needs to solve. Do you need to change your retirement goals, or build more wealth?

On the other hand, you might discover you're already on track. That's useful too.

Because you may realise you don't need to save quite as aggressively as you thought.

… Or perhaps you could afford to retire earlier.

That's why a retirement plan isn't just about finding out whether you're “behind”.

It can also show you what's possible.

Step 4: Create a plan to close your wealth gap

If you've got a wealth gap you've got two broad choices.

You can:

1. Change your retirement goals e.g. Retire later, spend less, travel less, or work part-time for longer.

Or:

2. Build more wealth e.g. Save more, invest more, or change how you invest.

Often, your eventual plan will use a combination of both.

If you decide to build more wealth, the next question is: “How am I going to do it?”

You might use:

• KiwiSaver
• shares
• managed funds
• investment property
• or a combination of investments.

Here's a simplified example.

Let's say you've worked out that you need to create an extra $600,000 of wealth over the next 15 years.

One option might be buying a $700,000 investment property.

If that property doubled in value over 15 years, it would create wealth that can help close that wealth gap.

Step 5: Review your retirement plan every year

Creating your retirement plan isn't something you do once at 40 and then pull out again at 65.

Why? Because life changes.

You might get receive an inheritance, sell a business, buy another property, go through a separation or decide you want to retire earlier.

Your investments won't perform exactly as expected either.

Think about it like sailing across an ocean. You know where you're trying to get to. But you can't point the boat in that direction on day one and assume you'll arrive exactly where you planned 20 years later.

That's why you should review your retirement plan at least once a year.

If your managed fund has an excellent year and grows much faster than expected, you might be able to reduce your contributions. If it underperforms, you might need to contribute more.

Do I need a financial adviser to create a retirement plan?

You can create a retirement plan yourself. You can create spreadsheets, use online calculators or pay for financial planning software.

But the more complicated your retirement goals become, the harder the calculations get.

That's where a financial adviser can be useful.

The catch is that financial planning can be expensive.

Depending on who you use and the level of advice you need, creating a financial plan can cost hundreds or even thousands of dollars.

This is why at Opes Partners, we offer free Wealth Plans. This is where investors can get access to a financial adviser and a wealth plan without paying a fee.

So, how do I create my retirement plan?

A good retirement plan isn't about perfectly predicting what your finances will look like 20 or 30 years from now.

You can't.

It's about knowing where you want to end up, having a plan to get there, and checking you're still on course along the way.

Because retirement shouldn't be something you just arrive at.

It should be something you've planned for.