How much super should I have to retire?
How much super should I have to retire?
Section Heading
When it comes to estimating how much you’ll need for a comfortable retirement, you have a few things to think about. These things can include:
How soon do you want to retire?
How long do you want to be retired?
What’s your current lifestyle like?
What do you have planned for your future?
The next part is estimating how much you’ll have when you eventually retire.
Some of the determining factors may include —
How much are you earning as an employee
(or business owner) now?
Are you currently making personal super contributions?
What’s your current superannuation balance?
Do you have assets and what is the sum total of these assets?
A comfortable lifestyle versus a modest lifestyle
For a long time, most Australians have used a million dollars as an ideal amount of money to retire on. Realistically speaking, retiring on this amount is not possible for the majority of Australians.
According to the Association of Superannuation Funds of Australia (ASFA), Australians around the age of 65 who own a home and are in relatively good health will need the following amount of money each week and year in retirement.
|
|
|
|
Modest lifestyle | |||
|
Single |
|
$880.49 per week |
$45,962 per year |
|
$558.21 per week |
$29,139 per year |
|
Couple |
|
$1,240.83 per week |
$64,771 per year |
|
$803.24 per week |
$41,929 per year |
As defined by ASFA a comfortable retirement lifestyle:
“ — enables an older, healthy retiree to be involved in a broad range of leisure and recreational activities and to have a good standard of living through the purchase of such things as; household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel. ”
–
ASFA defines a modest retirement lifestyle as —
“ — a lifestyle considered better than the Age Pension, but still only allows for the basics. ”
–
How much do I actually need to retire and live the lifestyle I want?
But if this is something you want to work towards or if you want to work towards an even better lifestyle, you’re going to need to think about:
Do I need to work more?
Do I need to earn more?
Do I need to save more?
If these questions are currently on your mind, you may want to get in touch with a financial planner to help you take control of your financial future.
Sources of income to fund life in retirement
As you get closer to retirement age, you’ll need to start thinking about the various sources of income you can use to fund your life in retirement.
These can include:
-
Your SUPERANNUATION
The super you’ve accumulated over the years is going to play a key role in your retirement.
If you’re getting closer to retirement age but not sure if you’re financially ready for retirement, make it your mission to find out exactly how much super you’ve accumulated.
From there, you can use our super calculator estimate where that balance is going to be at the point at which you want to retire.
If it’s not where you want it to be, you may want to consider salary sacrificing or making personal after-tax contributions.
These contributions can give your super a boost and set you up for a more comfortable post-work life.
-
Your SAVINGS
This would be the money you’ve earned from working and put aside after expenses over a lengthy period of time.
If you have an excess of savings set aside (in a bank account or a term deposit), you may want to consider using it to make an after-tax contribution to your super. This can give your super a boost to set you up for a more comfy post-work life.
-
Your INVESTMENTS
If you’ve bought shares over the years, the market value of those shares may have risen. If this is the case, you may make a healthy profit from them.
If you’ve invested in a home, you may want to sell your home for a healthy capital gain and then consider a downsizer contribution.
-
The AGE PENSION
If you have a lower amount of super, the Commonwealth Government offers the Age Pension as an income supplement.
If you can meet the Commonwealth Government’s minimum requirements, you may be eligible for the Age Pension.
Need help getting ready for retirement?
It’s okay if you do.
Not everyone is an expert with money. Trying to work out what you’ll need at the point at which you want to stop working by yourself can be particularly tricky.
If you’re not sure if you have enough to retire, you may want to speak with a financial adviser. As a Super SA member, you can get financial advice from any planner you like. Feel free to get in touch with the Financial Planning Association of Australia if you like.
But if you would like financial advice from us, Super SA and our partner, IFS, are here for you. Just give our financial advisers a call on 1300 162 348, they’d be happy to chat.
If you need help making contributions (before or after tax) or advice on Early Access to Super (EATS) and/or Transition to Retirement (TTR), you can call the Member Services team on 1300 162 348.
Want to learn more about retirement planning?
Are you thinking about retirement? Whether the big day’s five years or one year away, it’s time to take action to get yourself on the right track for a well-planned, comfortable future.
