How much super will you need?

Super News

Many of us will spend a quarter of our life in retirement.1 While it’s great that we’re living longer, what does it mean financially? Just how much money will you need to enjoy the life you want?

As people move towards and then into their 50s and 60s, a ‘life after work’ starts to loom large. But what will it actually look like? Sometimes it’s hard to bring the image into sharp focus. And critically, how much money will you need to fund the life you want in retirement? Unfortunately, like many things in life, there’s no simple answer.

There are as many visions of what a ‘good retirement lifestyle’ looks like, as there are people. For some it’s cruising around the world, others picture a caravan and the open road, perhaps it’s simply perfecting your golf swing, spending more time with the grandkids, or just pottering in the garden at home. Of course, each scenario requires a different level of income. So where does that leave you?

A rule of thumb

To help draw a line in the sand, the Association of Superannuation Funds of Australia have developed an indicative Retirement Standard of how much you need to fund a ‘comfortable’ life in retirement. By their calculations, in order to enjoy a comfortable lifestyle, single people will need $545,000 and couples $640,000 in super when they retire.1 That will deliver an annual income of around $43,200 and $60,843 respectively1, so you can enjoy such things as good health care, some travel, entertainment, good quality clothing, and household goods.

How will you get there?

Saving_for_retirementIt’s never too late to start planning for your retirement and making some adjustments now, could make a big difference to your finances later on. For a start, do you know how much super you have now? You can quickly check your current balance by visiting Members Online. Then you can use our online calculator to compare how much you have and how much you might need. The Lifetime Supermodeller also gives you an idea of how long your super may last. Setting a realistic date for retirement can help you can use the years leading up to that time to get your finances in good shape. For instance, try to minimise outgoings now. That way you may be able to put a little more into super, and every bit extra will help. Pay off credit cards and any other debts you may have.

 

There are also government concessions and the Age Pension to consider. The eligibility tests for these are quite complex, so you could familiarise yourself with them now to see if you may qualify. Start your research on the Department of Human Services website.

Explore all your options

It’s helpful to learn as much as you can about your super fund and the options it can offer you. For instance, The ESSSuper Working Income stream has been designed for members that want to transition to part-time work and ease into retirement while supplementing their part time earnings from their accumulated super. When a member permanently retires after preservation age or at 65, the Working income stream will become an ESSSuper Retirement Income Stream where investment earnings are concessionally taxed.

Find out more

The best thing you can do right now is arm yourself with as much information about your super as you can. You can attend one of our free seminars, or make an appointment with a Member Education Consultant. They’re the experts in your fund and there's no fee for their general advice. If you want advice specific to your personal financial situation, they can also refer you to one of our Financial Planners2.

1. How much super will I need?, ASFA Super Guru
2. ESSSuper Financial Advisers are authorised representatives of Adviser Network Pty Ltd (Adviser Network). Adviser Network holds a current Australian Financial Services Licence No. 232729 and is responsible for the financial services provided to you. ESSSuper has an arrangement with Adviser Network Pty Ltd to provide financial advice to ESSSuper members. ESSSuper pays Adviser Network a fee for this service. Neither the Board, nor the Victorian Government, guarantee or endorse any recommendations made by Adviser Network, or are responsible for the advice and actions of Adviser Network.

The information contained in this article is of a general nature only. It should not be considered as a substitute for reading ESSSuper’s Product Disclosure Statement (PDS) that contains detailed information about ESSSuper products, services and features. Before making a decision about an ESSSuper product, you should consider the appropriateness of the product to your personal objectives, financial situation and needs. It may also be beneficial to seek professional advice from a licensed financial planner or adviser. An ESSSuper PDS is available on our website or by calling 1300 650 161.


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