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Planning for retirement

An important step in planning your retirement is to understand how much super
you might need, and what money you’re likely to have in retirement. The likelihood is that once you retire, you may live for another 20 years or so and whatever your retirement plans you’ll need money to meet your day-to-day expenses. While everyone wants to live comfortably when they stop work - figuring out how much you need to do this can be a challenge. To help, we've provided you with the following information and tools:

1. How much super you will need for retirement

The Association of Superannuation Funds of Australia (ASFA) has looked at some scenarios to help you work out how much individuals and couples might need to save for their retirement. The following is an indicator of what you might need for a comfortable retirement. It is based on a number of assumptions, including retirement at age pension age and that you'll be entitled to some Government age pension.

Lump sum required for comfortable retirement for a couple = $510,000
Lump sum required for comfortable retirement for a single person = $430,000
Figures are based on the March 2015 ASFA Retirement Standard estimates.

Check out the ASFA website  for more information on the ASFA Retirement Standard calculations and the assumptions these calculations are based on.

2. The amount you may need each year when you stop work

To work out how much you may need in retirement, ASFA has looked at two types of lifestyles - modest and comfortable.

A Modest Lifestyle
This is better than the Government age pension, but you'll still only be able to afford fairly basic activities. For a single person it's estimated that a modest lifestyle would cost about $23,438 a year and $33,799 for a couple.

A Comfortable Lifestyle
This means you can enjoy a broader range of leisure and recreational activities and have a good standard of living. You would still be able to pay for things like household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel. For a single person it's estimated that a comfortable lifestyle would cost about $42,569 a year and $58,444 for a couple.

Figures are based on the March 2015 ASFA Retirement Standard estimates.

Check out the ASFA website  for more information on the ASFA Retirement Standard calculations and the assumptions these calculations are based on.

 

3. Find out how much you will have and if you're on track

The amount of super you’ll have when you retire depends on a range of things including:

  • Your salary (including the superannuation benefits funded by your employer)
  • Your additional voluntary contributions to your super (before-tax and after-tax)
  • The investment returns of your accumulation-style super
  • How long you are likely to work and how long your Member Savings or accumulation-style accounts will be invested before you need to access it.

To get an estimate of how much your APSS benefit will be worth in retirement, you might like to check out our calculators. Based on your current details, you can get an idea of what your total APSS benefit might be when you retire, and what level of annual income this benefit might give you.

You can also adjust some of the calculator assumptions - particularly things like personal contributions, investment returns, retirement age, etc. - to see what a difference this could make to your overall retirement savings and retirement income.

Calculators are a useful way to look at different scenarios and learn what may and may not work for you. However, they will never provide you with an exact answer as they are only estimates. It's always a good idea to discuss your investment strategy and choices with your financial adviser before making decisions about your super savings.