How much will you need?
Some financial advisers suggest a common target for retirement income is around 60% of your salary at retirement.
SET YOUR RETIREMENT OBJECTIVES
Working out how much money you'll need in retirement can be challenging. It's important that you understand your retirement objectives. Working out the lifestyle you want will give you an idea of how much you'll need each year.
Senior Financial Adviser with ESSSuper, David Goodwin, says it is very difficult to generalise about the amount of money people need at any age. 1
"Budgeting is such an individual process. We see members who can live very comfortably on the age pension while others feel they need much more than this for a comfortable life. 'How much do you need', is one of the first questions we ask any member who comes to see us and it is something everyone needs to work out as an individual or couple."
"We recommend you complete a budget before you retire to determine your needs. A good place to start is the Budget Planner on the MoneySmart website."
MoneySmart Budget Planner2
A complete budget can help you determine your income needs in retirement
What lump sum do I need?
To give you an idea, The Association of Superannuation Funds of Australia (ASFA) has estimated how much you'll need, as a lump sum, to live 'comfortable' lifestyle.
A single person aiming to have the $42,861 ASFA estimates you'll need for a comfortable lifestyle, will need a lump sum retirement benefit of $545,000.
A couple also seeking a comfortable lifestyle, will need $640,000.
ASFA Retirement Standard Budgets, September 20163: Comfortable Lifestyle
||LUMP SUM REQUIRED
A comfortable lifestyle: allows for a broader range of leisure and recreational activities, purchase of household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment and domestic and occasional international holiday travel.
Learn more at superguru.com.au