How much super do I need?
How much you will need to save depends on a number of factors and it’s a question that can be answered in two parts.
How much will you need each year in retirement?
The annual income that may be required to support ‘modest’ and ‘comfortable’ retirement lifestyles (1).
| |
Single
|
Couple
|
|
Modest lifestyle
|
$19,901
|
$27,902
|
|
Comfortable lifestyle
|
$38,403
|
$51,437
|
How much do you need to save?
It has been estimated that a single person will need around $460,000 to produce the annual income of $38,403 that is needed for a ‘comfortable’ lifestyle (2).
The table below contains examples of the amount of additional super contributions above the 9% SG contributions needed to produce an account balance of around $460,000 at age 65 (3).
| |
Age |
Salary |
Current super balance |
Earning rate (before tax) |
Salary sacrifice contribution to reach target (in addition to 9% SG contributions) |
Super account balance at age 65 |
| Jennifer |
25 |
$50,000 |
$10,000 |
8% |
3% pa
$30 a week |
$455,000 |
| Jason |
35 |
$50,000 |
$20,000 |
8% |
10% pa
$96 a week |
$464,000 |
| Sarah |
45 |
$50,000 |
$30,000 |
8% |
25% pa
$240 a week |
$466,000 |
| Robert |
55 |
$50,000 |
$60,000 |
8% |
25% pa
$240 a week |
$462,000* |
* Robert must work to age 73 to accumulate the required amount
But remember …
The information in the page is designed to give you a sense of how much money you may need to retire. The figures are an example only and cannot accurately predict your retirement needs or your end super balance. These will depend on a range of factors including your personal circumstances and future economic conditions. Before making a decision about your super you should seek professional advice to determine a plan that is appropriate for you.
Other useful tools:
(1) Source: The Westpac – ASFA Retirement Standard. September Quarter 2009 report. ‘Modest’ means better than the age pension, but only participating in fairly basic activities. ‘Comfortable’ provides for a broad range of leisure and recreational activities and a good standard of living through the purchase of such things as household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel. The report is available from www.superannuation.asn.au/RS/default.aspx
(2) Source: ASIC Super Decisions booklet January 2009 available on the FIDO website at www.fido.gov.au under Publications and resources/Brochures and booklets.
(3) These examples have been calculated using the superannuation calculator on the FIDO (Australian Securities and Investments Commission) website. For assumption and limitations refer to www.fido.gov.au/fido/fido.nsf/byHeadline/Brochures and click on the Super decisions booklet link.
|
