How much will you need to retire?

Published 11 August 2020

The amount you will need to save for your retirement depends on the type of lifestyle you want. There is a lot to think about, but there is plenty of help and guidance available.

A good place to start is the Association of Superannuation Funds of Australia’s (ASFA) Retirement Standard. This is an analysis of the annual budget needed by Australians to fund either a comfortable or modest standard of living.

ASFA’s definition of these retirement lifestyles are:

• Modest – considered better than the Age Pension, but still only able to afford fairly basic activities.
• Comfortable – enables a broad range of leisure and recreational activities and a good standard of living through the purchase of items such as: household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel.

ASFA updates its Retirement Standard every quarter, showing the annual budget needed for single people and couples aged around 65 years, and around 85 years.

According to ASFA’s figures for March 2020, single people aged around 65 will need an annual income of $44,183 to live comfortably during retirement, and couples aged around 65 will need $62,435.

ASFA’s figures assume that the retirees own their own home outright and are relatively healthy. Other assumptions made in its research are explained on the ASFA Retirement Standard web page.

Checking you are on track

To see whether you are on track to achieve your preferred level of retirement, you can use LGIAsuper’s retirement calculator. This can help you estimate your superannuation balance and income for the age at which you choose to retire, adjusted for inflation¹.

Using this calculator can help you to plan how much to contribute, when to retire, the fees you pay, and how your superannuation will be invested.

You can also calculate your possible retirement income depending on other personal circumstances, including the amount and frequency of regular pension payments as well as any Government Age Pension you may be entitled to receive.

If you need to grow your superannuation

If these calculations show that you are short of where you want to be, you can act today to grow your superannuation for the future.

There are various ways to grow your superannuation. These include before-tax (concessional) contributions such as salary sacrifice, after-tax (non-concessional) contributions from your take-home pay, spouse contributions, and downsizer contributions.

You should consider your contributions limit (cap) for both before-tax and after-tax contributions. There are tax concessions for putting money into superannuation, but if you exceed your limit, you could pay extra tax.

Find out more about contribution limits

Financial advice

LGIAsuper members can access our financial advice service². Our financial advisers can help you create a plan to achieve your financial and lifestyle goals.

We offer our members two types of advice: limited advice on a single issue related to superannuation at no additional cost; and comprehensive retirement advice where fees will vary depending on the type and complexity of advice.

Call us on 1800 444 396 to discuss the type of advice that suits you best.