How much super is enough?

 

How much super is enough?

What kind of retirement are you looking forward to? Are you planning overseas trips, more time with family or a long trip around Australia? The big question is how much will it all cost? Closely followed by how much do I need to save in order to fund those plans?

Luckily, some help is at hand. The Association of Superannuation Funds (ASFA and Westpac) regularly research just how much people need to live on in retirement.

A modest or a comfortable life?

Westpac/ASFA reports on living costs for singles and couples, and recognises two lifestyles – modest and comfortable – and what each one costs.

A modest lifestyle allows a retiree to pay for the basics, and only a little more than would be possible on the government’s Age Pension. There’s no money for overseas travel, and both home entertaining and dining out are very limited. Private health insurance is beyond this budget.

A comfortable lifestyle allows for fortnightly entertaining at home, a glass of wine a day and eating out three times a week at a club restaurant, or once a week at a more expensive place. Private health insurance and an overseas, as well as a local, holiday each year are also possible.

Status	Modest Lifestyle	Comfortable Lifestyle	Age Pension (per fortnight)
Single	$30,000 p.a.	$40,000 p.a.	$729.30 ($18,962 p.a.)
Couple	$40,000 p.a.	$55,000 p.a.	$1099.40 ($28,584 p.a.)

The annual budgets shown are not those determined by Westpac/ASFA, but are broadly in line with those budgets.

How much money might I need to save for retirement?

The above ASFA calculations show how much money you might need each year in retirement. But the next question is - how much super will you need to save over your working life to achieve that level of income in retirement? The tables below show the amount of money you might need at retirement based on differing retirement ages and annual incomes.

 How much do you need to retire? (Single**)

Budget p.a. (net of tax)	Retire at age…
	60	65	67
Modest $30,000	$270,000	$160,000	$150,000
Comfortable $40,000	$485,000	$370,000	$338,000

 How much do you need to retire? (Couple**)

Budget p.a. (net of tax)	Retire at age…
	60	65	67
Modest $40,000	$303,000	$153,000	$144,000
Comfortable $55,000	$592,500	$450,000	$420,000

**This information is illustrative only as it is based on a number of assumptions that may not be relevant to you. You should seek professional advice before making a financial decision based on this illustration.

The NGS Super calculators are an excellent guide to see how your super is tracking. The Future Super calculator shows how your super is growing and the approximate balance that you’ll have at retirement if you continue to earn your current income. The Extra Contributions calculator demonstrates how adding some extra dollars to your super can really impact your final balanced at retirement.

If you would like to discuss your financial situation and goals in more depth, you can also speak to an NGS financial planner. Every NGS Super member is entitled to a free initial consultation. If you would like to make an appointment, please call 1300 133 177.