According to a recent survey by Mortgage Choice Limited (ASX: MOC), nearly two-thirds of all Australians are concerned they won’t have enough money to retire comfortably.

While alarming, this data is not surprising when you consider that most people don’t start thinking about their retirement until they’re over 50,” Mortgage Choice chief executive officer John Flavell said.

But more than half of us won’t bother giving our retirement serious thought until we are in our 50s.

By then it’s virtually too late to do much about it.

As Mr Flavell says, “Of course, many don’t realise that 50 is simply too old to start saving and planning for retirement. In reality, people should start their retirement planning much earlier in life.

According to the Association of Superannuation Funds of Australia, couples will need approximately $640,000 in savings, while singles will need approximately $545,000 to live a comfortable lifestyle in retirement.

Another issue Mr Flavell points out is that many Australians could enter retirement with debt hanging over their heads – whether it’s a mortgage, credit cards, personal loans or something else.

Over the coming years, statistics suggest that many Australians will reach retirement age and still have a mortgage. Soaring property prices combined with the fact that people are taking out home loans later in life, will ensure many still have debt in their twilight years, ” says Mr Flavell.

It means Australians need to start saving and planning for their retirement from a much earlier age. Even small savings can compound into a large balance given a long enough time period.

Just $1,000 can turn into more than $17,000 over 30 years at an average annual rate of 10% if dividends are reinvested – which is roughly what the sharemarket earns over long periods. $10,000 turns into more than $174,000, and that’s just one initial deposit, with no additional contributions.

If you consider that listed investment company Contango Microcap Ltd (ASX: CTN) has delivered 16% annual returns over the past 12 years, that could turn an initial $10,000 investment into $858,499 – more than enough for a comfortable retirement. But it does mean making a sacrifice early on in life, before the age of 35.

And if you add regular superannuation contributions over your working life into a low-cost super fund like an industry fund, your retirement will be one you can look forward to – rather than worry about.

Foolish takeaway

The key is to invest early and invest well into high quality companies. That means no speculating and trading. It means investing and holding for the long term. The very long term.

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Motley Fool writer/analyst Mike King owns shares in Contango Microcap. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.