How much super you need

Take some of the guesswork out of planning for the future. Work out how much super you’ll have when you retire, and if it will be enough to fund the lifestyle you want.

It’s never too soon to start planning for a better financial future.

Estimate how much super you’ll have

You probably know how much super you have now, but do you know how much you’ll have when you retire?

Use the Moneysmart retirement planner to estimate:

  • how much money you’ll have to spend each year once you retire

  • how fees, investment options and contributions will affect your retirement income

You can also use the planner to test out different scenarios and work out how to grow your super.

How much super you’ll need when you retire

The amount of super you’ll need when you retire depends on:

  • your big costs in retirement, and

  • the lifestyle you want

Most people can now expect to live well into their eighties. This means that if you stop working at 65, you’ll need retirement income for 20 years or more.

Your big costs in retirement

Think about any big costs that might be part of your retirement plans. For example:

  • paying off your mortgage

  • rent

  • renovating your home

  • travel

  • medical costs

The lifestyle you want

Think about how you plan to spend your money in retirement. If you own your own home, a rule of thumb is that you’ll need two-thirds (67%) of your pre-retirement income to maintain the same standard of living in retirement.

The Association of Superannuation Funds of Australia (ASFA) provides an industry retirement standard. This estimates how much money you’ll need, depending on your lifestyle.

ASFA Retirement Standard

Comfortable lifestyle

Modest lifestyle

Single

$43,901 a year

$841 a week

$27,987 a year

$536 a week

Couple

$62,083 a year

$1,189 a week

$40,440 a year

$775 a week

Source: ASFA, September quarter 2020

ASFA estimates that the lump sum needed at retirement to support a comfortable lifestyle is $640,000 for a couple and $545,000 for a single person. This assumes a partial Age Pension.

ASFA estimates that a modest lifestyle, which covers the basics, is mostly met by the Age Pension. They estimate the lump sum needed to support a modest lifestyle for a single or couple is $70,000.

Build up your super

Many things contribute to your income in retirement, including investments outside of super and assets such as your home, especially if you downsize.

If you decide it is important to build your super, there are some actions that can make a big difference over time. Think about:

If you don’t have as much as you’d like, it’s never too late to build up your super to boost your retirement savings.

If you need financial advice

Planning for your retirement is complex, and everyone’s situation is different. To help you plan ahead, call us on Phone 02 9279 2001 today. 

Source: Moneysmart .gov.au 
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/grow-your-super/how-much-super-you-need

Important note: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.  Past performance is not a reliable guide to future returns.

Important
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.