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.
Comfortable retirement lifestyle
For a single person wanting a ‘comfortable’ retirement lifestyle, ASFA suggests an annual income of around $44,000, and for a couple, it gives a figure of more than $60,000.
That amount of money might cover an annual holiday in Australia, eating out regularly at restaurants, regular participation in leisure activities and owning a reasonable car.
To drive this level of income annually, ASFA estimates what people might need in assets to support such retirement expenses.
This amount could be made up of superannuation, shares, cash, and investment property, but not the home you live in.
Modest retirement lifestyle
Living a modest lifestyle in retirement could include a couple of short breaks each year near where you live, eating out infrequently at restaurants, trips to the cinema and some paid leisure activities as well as owning an older, less reliable car.
Some of your expenses might be met by the age pension.
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.