How much is enough?

How big is your nest egg?

When it comes to super, size does count. Your employer’s super contributions may not be enough if you want to be financially secure when you retire.

Find out approximately how much money you’ll need when you stop working.

How much is enough super?

How much extra money you contribute to your super depends on what you’ll need to live off once you retire. The amount of super you need depends on:

  • How long you live
  • What type of lifestyle you want
  • Future medical costs

The table below will give you a rough idea of how much money you need to support a modest or comfortable retirement. It applies for people retiring at age 65 who will live to an average life expectancy of about 85. It assumes you own your home.

ASFA Retirement StandardAnnual living costsWeekly living costs
Couple – modest$39,353$754
Couple – Comfortable$60,264$1,154
Single – Modest$27,368$524
Single – Comfortable$42,764$819

Another way to estimate how much money you will need in retirement is to assume you need 67% (two-thirds) of your income before you retire in order to maintain the same standard of living in retirement. This estimate is only suitable for above average income earners.

ASFA estimates the lump sum needed to support a comfortable lifestyle for a couple is $640,000 (or $545,000 for a single person) assuming a partial Age Pension. ASFA also estimates that because a modest lifestyle is mostly met by the Age Pension the lump sum required to support it for a single or couple is $70,000.

Source: ASFA Retirement Standard, March Quarter 2018.

How are your super savings tracking?

When you have an idea of how much you’ll need n retirement, the next step is to work out how you’re tracking.It’s never too late to boost your retirement savings if you don’t have as much as you’d like to have. Our retirement planner can estimate what your income in retirement will be from super and/or the Age Pension, and lets you explore ways to improve your outcome.

Work out what income you are likely to have at retirement.

Use the retirement planner

Knowing how much you’ll need when you stop work is a good starting point. The key is to act now and do as much as you can to grow your super.

Source: moneysmart

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The information provided in this article does not constitute specific advice. For further information , you should contact your professional adviser.