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How much do I need to retire?

It's the most common question we get asked as financial planners. How much do I need to retire but it's like asking how long is a piece of string. It all depends! It depends on what type of retirement you want, how long you'll be in retirement for, what additional expenses you'll have, how your money is invested in retirement, how many holiday's you're going on, if the kids are still at home or you're their resident baby sitter, and the list goes on.

Each year the Association of Superannuation Funds of Australia (ASFA) issues new figures that they believe, based on their research, that is needed to live a modest and comfortable lifestyle in retirement. 

Based on the figures released by ASFA, an average single retiree would require approximately $545,000 in super benefits in order to fund a comfortable retirement and a couple would need around $640,000. However if you were after just a modest retirement, in addition to receiving the Age Pension, they estimate you would need only $35,000 for a couple and $50,000 for a single.

But what does comfortable and modest mean when we're talking about retirement lifestyles? Well, ASFA have suggested...

A comfortable lifestyle would mean spending around $43,695 per annum for a single and $60,063 for a couple. It includes home improvements, pest control, alarm services, impulse purchases, overseas travel, etc. 
A modest lifestyle would cost only $24,270 per annum for a single and $34,911 for a couple. It covers the essentials however just on a more basic scale like reduced utility bills, groceries, local short holidays or day trips, with no extras.
The best way to determine your own actual retirement lifestyle costs is to complete a budget now. Know what you're spending on your current lifestyle and determine what would and wouldn't remain once you hit retirement. Things like Citilink and parking fees would drop but holiday costs would most likely increase. Once you know how much you need to live off in retirement each year, you can work backwards to determine the lump sum amount you need to assist you cover your retirement income. 

If you are thinking of retiring in the coming years, you should give us a call today so that we can get some solid plans in place to achieve the retirement you desire and work out for you how much you'll need in retirement!

September 2017

Copyright © Cargill Financial Pty Ltd, All rights reserved.
This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, you should consider whether the information is appropriate in light of your particular objectives, financial situation and needs.
The information provided in this newsletter is based on our understanding of the legislation and other government policies and documentation current as at the date of publication. It does not constitute legal or tax advice. You should consult your relevant Professional Adviser for advice in relation to your particular situation. Whilst every effort has been made to ensure the information is correct, its accuracy and completeness cannot be guaranteed, thus Cargill Financial or Securitor cannot be held responsible for any loss suffered by any party due to their reliance on the information or arising from any error or omission.  

Cargill Financial Pty Ltd (429004) is a Corporate Authorised Representative of Securitor Financial Group Ltd ABN 48 009 189 495 AFSL 240687. You can read our Financial Services Guide (FSG) here and our Adviser Profile here.
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Cargill Financial · 74 Keilor Road · Essendon, Vic 3041 · Australia

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