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How much superannuation will i need?

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9th Nov 2009 by Tobias John Sterling

Obviously, how much superannuation you will need in retirement depends on factors such as what sort of lifestyle you want to have, whether you will be living alone or with a partner, and whether you own your own home or will be paying rent. The Association of Superannuation Funds of Australia Limited (ASFA) has conducted research which estimates that a 'modest' lifestyle in retirement requires an income of around $18,920 (today’s dollars) per year if you are single person, or about $26,531 for a couple. These figures assume free accommodation. A modest lifestyle is one where there is little or no spending on things such as gifts, luxuries, going out for food or entertainment, or expensive travel.

ASFA's estimate for a 'comfortable’ lifestyle in retirement is significantly higher at around $36,607 if you are a single person, or about $48,962 (again these figures are in today's dollars). This kind of lifestyle includes domestic and international travel, spending on updating items such as computers and home entertainment equipment, and regular eating out.

Exactly how much you will need to put into super per year in order to have these kinds of incomes in retirement depends on how much super you have now, how old you are, when you want to retire, super fund fees, market performance, and whether you want to preserve the balance of your superannuation in retirement or allow it to run down. These kinds of considerations can be plugged into an online superannuation calculator such as the one available at https://www.colonialfirststate.com.au/firstnet/adviser/calculators/howmuchsuper/. At best you'll get an estimate, but even that can be helpful.

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This answer is the subjective opinion of the writer and not of FinancialAdvisory.com



22nd Oct 2009 In Retirement 1 Answers | 446 Views
Subjects: superannuation,

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