Do you have enough to retire? Answering this question isn't as simple as stating how much money you should have in your superannuation. Every aspect of your financial life will impact your ability to save for and then fund your retirement. This includes your debts, your current and future living expenses, whether or not you own your own home and your investments (or lack thereof) outside of super.
There are a few ways to figure out how much money you'll need to retire, which we'll outline in this guide. Once you know how much to aim for, we'll then take you through some of the strategies to achieve it.
Retirement savings targets can vary depending on your income, lifestyle, and individual circumstances. Determining how much you'll need for a comfortable retirement depends on various factors.
Your retirement expenses: Consider the significant expenses you anticipate in retirement
Your desired lifestyle: To estimate the amount you need for your desired retirement lifestyle:
Guidelines for retirement savings: Several organisations provide guidelines for retirement savings:
Super Consumer Australia has conducted extensive research on retirement savings targets, focusing on different income groups to provide a more comprehensive perspective.
According to their findings, the average retirement income target for various income earners is as follows:
Add the table here: https://app.datawrapper.de/table/xXLj0/publish
The ASFA (Association of Superannuation Funds of Australia) retirement standard provides estimates for your retirement expenses based on your desired lifestyle:
These figures are based on retirees aged 65 with an average life expectancy of around 85 and assume home ownership.
| If you're | You'll need this much for a modest retirement | You'll need this much for a comfortable retirement |
|---|---|---|
| Single (aged around 65) | $32,417 per year ($623 per week) | $50,981 per year ($980 per week) |
| A couple (aged around 65) | $46,620 per year ($896 per week) | $71,724 per year ($1379 per week) |
It's important to note that this figure is based on the top 20% of earners and may not reflect the retirement needs of all income groups.
Here's a brief overview of what the ASFA Retirement Standard considers to be a modest retirement versus a comfortable retirement.
| Modest retirement | Comfortable retirement | |
|---|---|---|
| Leisure activities |
|
|
| Utilities and services |
|
|
| Personal items |
|
|
It's crucial to acknowledge that retirement planning is a highly individualised process, and everyone's financial situation and lifestyle goals are unique. While the ASFA Retirement Standard (AFSA) and Super Consumer Australia findings provide valuable guidance, it's essential to remember that these figures should be used as estimates and not as strict rules.
Disclaimer: Each person's requirement for retirement is different, and the above figures should serve as a starting point for your retirement planning. Factors such as personal expenses, health considerations, and individual circumstances can significantly influence your retirement income needs. It's advisable to consult with a financial advisor or planner to create a personalised retirement plan that aligns with your specific requirements and aspirations. These figures are intended to offer general guidance and may not apply to every individual's situation.
Throughout different stages of life, retirement planning plays a crucial role in securing your financial future. Here's why saving for retirement is essential:
1. Building financial security: In your 20s, 30s, and 40s, focus on building savings and growing your superannuation for a secure future.
2. Assessing retirement readiness: Approaching your 50s and 60s, evaluate your financial situation in relation to retirement, factoring in assets, investments, and potential aged care needs.
3. Considering life expectancy: Life expectancy in Australia has risen significantly. Plan for a retirement that can sustain you over a potentially longer lifespan.
4. Continuous improvement: At any age, it's not too late to enhance your financial prospects. Consult a retirement planning professional to ensure you're on the right track.
By starting early and adapting to changing circumstances, you can work towards a financially secure retirement, even as life expectancies increase.
| Response | WA | VIC | SA | QLD | NSW |
|---|---|---|---|---|---|
| 1000000 | 28.44% | 28.52% | 16% | 21.11% | 23.1% |
| 500000 | 20.18% | 14.07% | 21.33% | 19.1% | 18.35% |
| 50000 | 7.34% | 1.48% | 5.33% | 2.51% | 3.48% |
| 100000 | 4.59% | 2.96% | 6.67% | 5.53% | 4.11% |
| 250000 | 4.59% | 1.48% | 1.33% | 2.01% | 0.95% |
| 300000 | 4.59% | 3.33% | 6.67% | 2.51% | 2.53% |
| 800000 | 4.59% | 3.7% | 2.67% | 1.01% | 1.58% |
| 1500000 | 3.67% | 5.93% | 1.33% | 3.02% | 3.48% |
| 3000000 | 3.67% | 2.59% | 1.51% | 2.53% | |
| 200000 | 2.75% | 3.7% | 1.33% | 3.52% | 1.9% |
| 2000000 | 2.75% | 9.63% | 6.67% | 10.05% | 9.81% |
| 10000000 | 1.83% | 3.33% | 4% | 3.52% | 4.43% |
| 2500000 | 1.83% | 0.37% | 1.33% | 0.5% | 0.32% |
| 750000 | 1.83% | 0.37% | 2.67% | 3.02% | 3.48% |
| 150000 | 0.92% | 0.37% | 2.67% | 2.01% | 0.95% |
| 350000 | 0.92% | 0.37% | 1.01% | 0.63% | |
| 400000 | 0.92% | 3.33% | 4% | 2.51% | 1.58% |
| 5000000 | 0.92% | 2.59% | 2.67% | 1.51% | 4.43% |
| 600000 | 0.92% | 1.85% | 1.33% | 3.02% | 2.53% |
| 70000 | 0.92% | 1.33% | |||
| 7500000 | 0.92% | 0.32% | |||
| 999999 | 0.92% | 0.37% | 0.5% | ||
| 700000 | 1.11% | 1.33% | 1.51% | 2.85% | |
| 900000 | 1.11% | 2.01% | 0.32% | ||
| 550000 | 0.74% | ||||
| 80000 | 0.74% | 0.5% | 0.32% | ||
| 850000 | 0.74% | 0.32% | |||
| 1050000 | 0.37% | ||||
| 1200000 | 0.37% | 1.01% | 0.63% | ||
| 1600000 | 0.37% | 0.5% | |||
| 2000082 | 0.37% | ||||
| 240000 | 0.37% | 0.32% | |||
| 4000000 | 0.37% | 1.01% | 0.32% | ||
| 425000 | 0.37% | ||||
| 450000 | 0.37% | 0.63% | |||
| 500009 | 0.37% | ||||
| 60000 | 0.37% | 1.33% | 1.51% | ||
| 670000 | 0.37% | ||||
| 9000000 | 0.37% | 0.32% | |||
| 950000 | 0.37% | ||||
| 980000 | 0.37% | ||||
| 200500 | 1.33% | ||||
| 375000 | 1.33% | ||||
| 4000001 | 1.33% | ||||
| 65000 | 1.33% | ||||
| 650000 | 1.33% | 0.63% | |||
| 8000000 | 1.33% | 0.32% | |||
| 1250000 | 0.5% | ||||
| 180000 | 0.5% | ||||
| 1900000 | 0.5% | ||||
| 3500000 | 0.5% | ||||
| 6000000 | 0.5% | ||||
| 99999 | |||||
| 1300000 | 0.32% | ||||
| 1999999 | 0.32% | ||||
| 2100000 | 0.32% | ||||
| 3600000 | 0.32% | ||||
| 600900 | 0.32% | ||||
| 87000 | 0.32% | ||||
| 89000 | 0.32% | ||||
| 90000 | 0.32% |
The amount you need saved in your superannuation for a comfortable retirement varies depending on your age and retirement goals. To help you estimate the super balance required for a comfortable retirement, we've prepared a table with age-specific guidelines.
If you prefer a hands-on approach to calculate your retirement needs, here's a step-by-step guide to help you get started:
The 4% rule is a popular guideline used for retirement planning. It suggests that you can safely withdraw 4% of your retirement savings annually, adjusted for inflation, to make your savings last throughout your retirement.
Here's a simple hypothetical example to understand this.
It's essential to understand that the 4% rule applies only in the first year of retirement. After that, inflation dictates the amount withdrawn. The primary goal is to maintain the purchasing power of the 4% withdrawn in the first year of retirement.
Superannuation is a crucial part of retirement planning for Australians. It's designed to provide financial security during your retirement years. To calculate your superannuation needs and potential balance, you can use Finder's superannuation calculator.
This tool takes into account factors such as your current super balance, contributions, expected returns, and retirement age to help you estimate your super balance for retirement.
Using a superannuation calculator can simplify the process and provide you with valuable insights into your retirement savings goals. It's an ideal starting point for your retirement planning journey.
Budgeting for retirement is a critical step in ensuring financial security during your later years. To help you get started, here are some of the most common factors that can impact your ability to save for retirement:
To assist you further in creating a retirement budget, you can use our budget planner. This tool helps you organise your finances and estimate your retirement savings needs more effectively.
Additionally, you can stay informed about the current cost of living by visiting our cost of living page to ensure your budget remains relevant and adaptable to changing economic conditions.
The ideal retirement age varies for each individual, but there are some key considerations to keep in mind:
To determine how much you need to retire at 60, assess your expected retirement expenses and income sources. Consulting with a financial advisor can help you create a personalised retirement plan that aligns with your goals.
The amount of superannuation you should have today is influenced by your age, income, and individual circumstances. To determine a more accurate estimate based on your specific situation, you can use our superannuation calculator.
This tool takes into account factors like your age, income, and contributions to provide you with an estimate of how much super you should ideally have today to be on track for a comfortable retirement.
Inflation can significantly affect your retirement savings and purchasing power over time. Here's how:
For more information on the current cost of living and ways to manage inflation's impact, you can visit our cost of living page.
Compound growth allows your super returns to be reinvested and generate their own returns, helping your balance grow much faster over time. Here's how it works.
Superannuation is the main way of saving for your retirement in Australia. Your superannuation is one big investment portfolio in your name that's managed for you by your super fund.
Conservative super funds are designed to protect your superannuation savings. These funds have more money invested in low-risk, defensive assets like cash, fixed interest and bonds and less money invested in shares.
A high growth super fund invests more of your super into growth assets like shares, aiming for higher returns over the long term.
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