Having an idea of what sort of lifestyle you would like in retirement is a good starting point when determining how much you need to retire.
The Association of Superannuation Funds of Australia’s (ASFA) Retirement Standard has researched some benchmark annual budgets that might give you some idea of what you could need for a ‘comfortable’ or ‘modest’ retirement lifestyle.
Some of your expenses might be met by the Age Pension. However, the amount of savings needed to fund ASFA's definition of a 'modest' retirement is greater than the Age Pension.
ASFA defines a 'comfortable' retirement lifestyle as one where an older, healthy retiree can be involved in a broad range of leisure and recreational activities and have a good standard of living through the purchase of things such as household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel.
Making your own estimate
To personalise to your own circumstances you can estimate your costs per month for the following categories ASFA outlines:
- Household goods and services
You can then see whether you’re likely to reach this retirement income requirement by contributing to your super at your current rate by using our Retirement Calculator.
It’s important to keep in mind that your income and guaranteed super contributions may increase over this time period.
Giving your super a boost
It’s never too early or late to think about topping up your super. Putting in a little extra now can make a difference in the future.
Salary sacrificing might be an option, while bringing all your super together into one fund can help to manage fees that you might be paying.
Check the Australian Taxation Office (ATO) website for details about the latest contributions caps or talk to an adviser to discuss strategies to help you work towards your financial goals.