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Investor Education > Superannuation > How much super do I need?

HOW MUCH SUPER DO I NEED?

On average, Australians are living longer – male life expectancy is 84 and female is 88 year old. So if you plan to retire at 65, your retirement savings need to last at least 20 years post-retirement.

The actual amount required in retirement will inevitably depend on the person and their lifestyle. It is often stated that you usually need at least 60% of your current annual income for retirement as a rough estimate. So if you're earning $60,000 now, you'll need at least $36,000 as your retirement income.

Each quarter, the Association of Superannuation Funds of Australia benchmarks the annual budget needed by Australians to fund either  "comfortable" or "modest" standard of living. Both budgets assume that the retirees own their home outright and are relatively healthy.

RETIREMENT LIFESTYLES

Modest Comfortable

Better than the Age Pension

Only afford fairly basic activities.

Broad range of leisure and recreational activities

Good standard of living through the purchase of such things as household goods, private health insurance, a reasonable car, good clothes and a range of electronic equipment

Domestic and occasionally international holiday travel

 

Retirement Standard September 2013

 

MODEST LIFESTYLE

COMFORTABLE LIFESTYLE

  Single Couple Single Couple
Budget per week $441.71 $635.19 $802.22 $1096.90
Budget per annum $23,032 $33,120 $41,830 $57,195

RETIREMENT SAVINGS NEED TO SUPPORT A COMFORTABLE RETIREMENT STANDARD

Tax treatment and contribution level Wage of $30,000 Wage of $50,000 Wage of $100,000
9% contributions and investment earnings taxed at current rates $110,000 $183,000 $366,000
Lump sum if contributions made at the rate of 12% salary $146,000 $244,000 $487,000
Lump sum needed to support comfortable lifestyle for a couple (assumes receipt of part age pension) $510,000 $510,000 $510,000
Lump sum needed to support comfortable lifestyle for a single person (assumes receipt of part age pension) $430,000 $430,000 $430,000

All figures in today’s dollars (using 3.75% AWE as a deflator), investment earning rate of 7% assumed.

Visit the ASFA Retirement Standard to check the latest budgets

 

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