‘How much money do I need to retire?‘ is a phrase we’ve all pondered. Whether you fantasise about cruising around the world, campervanning around Australia or just pottering in the garden and improving your golf skills, making those retirement dreams a reality will likely depend on how healthy your superannuation contributions have been.
According to the Association of Superannuation Funds of Australia’s (ASFA) Retirement Standard, to have a “comfortable” retirement single people will need $545,000 in savings and couples will need $640,000. Use this guide, alongside super calculators and retirement savings calculators (see below), to estimate how much money you’ll need to have a “comfortable” or “modest” retirement.
Note: The standard is updated four times a year to take into consideration the rising price of items such as food and utility bills, as well as changing lifestyle expectations and spending habits. The standard includes the cost of things such as health, communication, clothing, travel and household goods.
If you’re looking to sharpen your finance knowledge in general, be sure to check out Bauer’s Financially Fit Females hub.
Super calculator: You do the maths
To find out how much money you’ll need to support the lifestyle you want in retirement, use the ASFA Retirement Standard super calculator tool. To work out how much money you’ll have when you retire, based on your current circumstances, use the retirement savings calculator at [superguru.com.au].
Many of us will spend more than a quarter of our life retired. For those aged 65, people are now living until an average age of 85 years (if you’re male) and 87 years (if you’re female). These figures could rise to 91 for males and 93 for females by 2050. So you might need a lot more money for your retirement than you think.
Unless you’re counting on a lottery win or growing your own personal money tree, super can help you enjoy your retired days by allowing you to maintain a good standard of living, which isn’t achievable by receiving just the age pension.
So, how much money do i need to retire?
According to the Australian Bureau of Statistics in 2014-15:
Around 1.7 million people relied mainly on the age pension for their income in retirement;
Around 705,000 people relied mainly on superannuation income;
In 2013-14, 50% of couples aged over 60 had an annual income of $32,000 a year;
In 2013-14, 50% of single people aged over 60 had an annual income of $27,000 a year.
