How much super you will need is a very personal issue and comes down to a number of factors including how you would like to spend your retirement.
However, as a guide, the Association of Superannuation Funds of Australia (ASFA) tracks the cost of living in retirement. The latest figures suggest a couple wanting a comfortable lifestyle in retirement will need $70,482 each year while a single person will need $50,004 each year1.
According to ASFA’s research, a comfortable retirement enables a retiree to have “a good standard of living including the ability to purchase household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international travel”.
So, if your retirement plans include home renovations, a boat or regular trips overseas, you’ll need to increase your retirement income. On the other hand, if you have more modest plans you might not need as much money.
The Australian Government’s Age Pension can provide you with income support and access to a range of concessions.
To be eligible you must:
You can learn more about the eligibility criteria for the Age Pension on the Department of Human Services’ website. If you are eligible, you may be able to top up the income you receive from your super with Age Pension payments.
Keep in mind opening, closing or starting a Pension account through your super fund could impact how much Age Pension you receive. If you apply for the Government Age Pension, 100% of your Pension account balance will be included in the assets test.
1. ASFA Retirement standard March Quarter 2023. The figures in each case assume that the retiree(s) own their own home, are around the age of 65 and relate to expenditure by the household. This can be greater than household income after income tax where there is a drawdown on capital over the period of retirement. Single calculations are based on female figures.
The amount of money you will need in retirement depends on the lifestyle you want. Consider how and when you can access your superannuation, and then create a plan to achieve your dream retirement.
Let our expert financial advisers help you create a plan for the future.
Use our retirement income calculator to get an idea of your future finances.
We offer a range of ways for you to get more clued up on what super’s all about.