Skip to main content

How much superannuation is enough? Retirement Financial Planning

What have you got planned for your retirement? For some of us it might be international travel, indulging in a new or favourite pastime, or simply spending time with the grandchildren.


Others may be hoping to retire earlier because their current job is physically demanding.


Whatever your retirement goals, making sure you fulfil them is largely down to how much you have saved in your super. The government Age Pension may seem like a reassuring safety net, but it’s not really designed to fund the standard of living you’re probably hoping for.


With life expectancy for a 60 year old expected to rise from 86 for men and 89 for women now to 91 and 93 respectively by 2055, many of us will spend more than a quarter of our life retired.1 And as our population ages, it’s likely age pension entitlements will continue to change – making it more important than ever to be self-sufficient in retirement.


The life expectancy of Australians continues to rise, so you could spend more than a quarter of your life retired.


So when Retirement Financial planning you ask when can I retire?


The first decision you need to make is when to retire – and this will depend on many personal considerations. Start by checking your age pension entitlement age and ‘preservation age’ (when you can access your super) here.


For example, if you’re born in 1957 you’ll be eligible for the age pension at 67 but you can access your superannuation savings from the age of 55.


The amount of super you will need once you retire depends on:


the lifestyle you want


your health and medical bills


how long you live after retirement


any other one off or ongoing repayments or financial responsibilities.


The Association of Superannuation Funds of Australia (ASFA) Retirement Standard2 benchmarks the annual budget needed by Australians to fund either a comfortable or modest standard of living when they retire, and is updated quarterly.


ASFA defines three levels of living standards, and assumes you own your home outright and are relatively healthy.


Comfortable


A comfortable retiree could afford a decent annual holiday in Australia and eat out regularly at good restaurants. You would be able to make home improvements, have a reasonable car and hold private health insurance.


Modest


A modest lifestyle could afford you short holiday breaks in Australia, with some cheaper eating out at local restaurants. You could repair your home but wouldn’t have the funds for any major improvements. You might have an older car and private health insurance.


Basic


If you need to rely solely on the age pension, you would find additional expenses such as car repairs, leaking roofs and holidays a challenge. Even heating bills could cause you financial stress.


How much money will I need?


According to the ASFA Retirement Standard, a couple that owns their home and is relatively healthy needs $34,051 a year for a ‘modest’ lifestyle. For more ‘comfortable’ this rises to $58,784 a year. You can take a look at how this budget works out here.


So as part of your Retirement Financial planning saving enough for a comfortable retirement could be a challenge for a couple on the average wage. According to a 2015 report from the Australian Institute of Superannuation Trustees (AIST), a full-time worker on average wages from 1992 (when compulsory super began) to 2014 should have super assets of around $131,000, based on compulsory employer superannuation contributions alone.3 So without additional voluntary superannuation contributions being made by that full-time worker, they are likely to have a significant funding gap between their current super assets and the amount they need.


Remember, the ASFA figures are benchmarks that exist to help you work out if you have the super savings to fund the retirement lifestyle you want, and everyone’s expectations are different hence why Retirement Financial planning is personalise matter. Another approach is to assume you need two-thirds of your current salary to keep living the same sort of lifestyle you currently have.


It’s never too late to save


Even if you make modest additional contributions to your super later in life, it could still make a difference to the type of retirement you enjoy.


So, if you’ve identified a difference between your super balance and the benchmark figures required Retirement Financial planning is a must.


Comments

Popular posts from this blog

The Painting of Destiny

"Are you sure of this, Navan?" The old pirate stared at King Mannas' chief merchant. However, his bright emerald green eyes sparkled with laughter. "The information came from Daoud, one of my former crew members, when I was ravaging the coastal villages of Vyrone." Navan smiled at the expression crossing Gerrod's face, whose family had fled from one of these villages. The Iron Falcon was a legend and parents had always used the threat of its crew and its flaming-haired captain to scare naughty children into sleeping and behaving differently. Gerrod quickly recovered and smiled. "Then he must be a man to be trusted, indeed." "Ah!" cried Navan. "Daoud will take the coin from the mouth of a dead man while it is still warm. I trust him only because he knows the fate of him who lies to me." I may have made him captain when I decided to infiltrate King Mannas' court, but he still knows who is in charge. "We must tell ...

Good Morning America is a popular

Good Morning America is a popular morning news show that airs on ABC. It has been a staple in American households since its debut in 1975. The show covers a wide range of topics including news, entertainment, lifestyle, and pop culture. With its team of talented hosts and reporters, Good Morning America provides its viewers with the latest updates on current events and trending stories. One of the things that sets Good Morning America apart from other morning shows is its lively and energetic atmosphere. The hosts, including Robin Roberts, George Stephanopoulos, Michael Strahan, and Lara Spencer, bring a sense of fun and camaraderie to the show. They engage with their audience and each other in a way that feels genuine and relatable. In addition to its engaging hosts, Good Morning America also features a variety of segments that cater to a diverse audience. From cooking demos and fashion tips to celebrity interviews and human interest stories, the show offers something for everyone. Wh...

The liz hatton

The liz hatton is a unique piece of headwear that has been gaining popularity in recent years. This hat is characterized by its wide brim and low crown, which gives it a distinctive and fashionable look. The liz hatton is often made of materials such as wool, felt, or straw, making it a versatile accessory that can be worn in various seasons. One of the key features of the liz hatton is its versatility. This hat can be dressed up or down, making it suitable for a range of occasions. Whether you're going for a casual look or a more formal outfit, the liz hatton can easily complement your ensemble. Additionally, the wide brim of the hat provides excellent sun protection, making it ideal for outdoor activities such as picnics or garden parties. In terms of style, the liz hatton can be compared to other types of hats such as the fedora or the boater. While these hats may have similar silhouettes, the liz hatton stands out for its unique shape and design. The low crown and wide brim of ...
  • Mukjizat Tuhan Masih Terjadi

    Baca: Mazmur 77  "Engkaulah Allah yang melakukan keajaiban; Engkau telah menyatakan kuasa-Mu di antara bangsa-bangsa." (Mazmur 77:15) Banyak orang berpikir bahwa mujizat Tuhan hanya berlaku pada zaman dahulu dan tidak berlaku untuk kehidupan di masa sekarang ini. Tetapi faktanya adalah Tuhan ma... Readmore

  • Cerpen Milestone

    Suatu ketika, di pinggir hutan, tinggallah seorang tua yang bijak. Orang-orang desa mengenalnya sebagai sosok yang baik hati. Pondoknya sering menjadi tempat berkunjung bagi yang membutuhkan bantuan. Makanan, minuman, obat-obatan dan seringkali nasehat-nasehat, kerap dihasilkan dari dalam pondok itu... Readmore

  • Cerpen Pak Budi Dan Malaikat

    Alkisah, diceritakan ada seorang laki-laki yang sudah berumur, Pak Budi namanya, sedang diantar oleh Malaikat Penjaga Surga. (ceritanya sudah di akherat ini) Pak Budi bertanya, ”Maaf, mas, eh mbak malaikat, saya mau di antar kemana sih?” Malaikat berkata dengan senyuman yang indah, &... Readmore

  • Cerpen Tukang Cukur

    Pada suatu hari Pak Haji dan tukang cukur berjalan melalui daerah kumuh disebuah kota. Tukang cukur berkata kepada Pak Haji, ”Lihat, inilah sebabnya saya tidak dapat percaya pada Tuhan yang katanya Maha Pengasih lagi Maha Penyayang. Jika Tuhan itu baik sebagaimana yang engkau katakan, Ia tidak... Readmore

  • Humor Cara Ekstrim Berhenti Merokok

    Cara Ekstrim Berhenti Merokok       Doni adalah seorang perokok berat. Bahkan bisa dibilang dia sudah kecanduan merokok. Namun, dia berniat untuk berhenti, dan mencari cara berhenti merokok. Doni mendatangi seorang dokter untuk berkonsultasi. Doni : "tolong dok beri saya petunjuk supa... Readmore

  • Humor Tukang Bohong

    Cerita Tukang Bohong      Tonton yang baru pertama kali akan pergi ke Jakarta diberi pesan oleh Diki, teman nya sekampung yang telah bertahun-tahun tinggal di Jakarta. "Hati-hati di Jakarta, karena orang Jakarta banyak bohongnya, tukang tipu."      Ketika hendak turun d... Readmore

  • Humor Di Sengat Lebah

    Disengat Lebah Seorang lelaki datang ke ruang praktek dokter dengan benjolan di jidat. Dokter: "Apa yang sakit?" Pasien (sambil menunjuk benjolan di jidat): "Ini, Dok." Dokter: "Kenapa?" Pasien: "Lebah, Dok." Dokter: "Hinggap di situ?" Pasien: "Iya, Dok." Dokter: "Terus disengat?" Pasien: "Belum sem... Readmore

  • Cerpen Pencuri

    Suatu ketika, tinggallah sebuah keluarga kaya. Keluarga itu, terdiri dari orangtua, dan kedua anak laki-lakinya. Kekayaan mereka sangatlah berlimpah. Lumbung mereka, penuh dengan tumpukan padi dan gandum. Ladang mereka luas, lengkap dengan ratusan hewan ternak. Namun, pada suatu malam, ada pencuri... Readmore

  • Humor Lupa Rumah

    Lupa Rumah     Selama beberapa tahun terakhir ini Pak Iwan membiarkan wajahnya ditumbuhi janggut, kumis dan cambang yang lebat. Pada suatu hari, semua itu dicukurnya habis.     Sepulangnya dari tukang pangkas, dia melihat puteranya sedang bermain di depan rumah. Dia ingin tahu, a... Readmore

  • Cerpen Ujian Saringan 3 Kali

    Di jaman Yunani kuno, Dr. Socrates adalah seorang terpelajar dan intelektual yang terkenal reputasinya karena pengetahuan dan kebijaksanannya yang tinggi. Suatu hari seorang pria berjumpa dengan Socrates dan berkata, ”Tahukah anda apa yang baru saja saya dengar mengenai salah seorang teman a... Readmore