According to the latest figures, Australians considering retirement may not need to worry too much about how much retirement money they need.
Those looking for a minimum balance should have at least $100,000 super before they retire, according to the latest Australian Superfunds Alliance (ASFA) retirement standards.
That’s about $45,106 a year for couples and $31,323 for singles ages 65 to 84.
However, if someone wants more than the basics of life, that number jumps dramatically.
Those who want to retire “comfortably” should have at least six times that amount in their accounts, with ASFA recommending a balance of $690,000 for couples or $595,000 for singles.
That’s $69,691 per couple per year and $49,462 per person.
Some of the big differences come down to lifestyle: People seeking a “modest” retirement are opting to forego vacations abroad, eat out at restaurants less often, and save on heating and cooling costs. increase.
According to ASFA Deputy CEO Glen McCrea, these aren’t the only things that have to be left out.
“We know people spend more on health as they age, and a comfortable budget will help them cover more medical, dental and other health care costs. health-related costs,” he said.
“Budgets for items like clothing, beauty salons and streaming services are also getting smaller. Phone and data plans are also more limited.”
The ASFA criteria also consider whether an individual or a couple receive a pension, and the government limits the amount an individual can receive based on their assets.
To receive the full annuity, the couple owning their home must have assets under $419,000, which jumps to $954,000 for the partial annuity.
There is also some doubt as to whether the “comfortable” guidelines offered by ASFA are that much fun, with Australian Wealth Advisor financial planner Andrew Tratt skeptical that ASFA’s standard $70,000 annual salary offers couples a lifestyle sounds “terrifying”.
“Most couples want to spend $80,000 to $100,000 a year to live a frugal life,” he said.
“This is not a luxury. With bills and living expenses of $1,000 a week and a $20,000 vacation at the end of the year, it’s not a luxury.
“This does not include incidental events or helping families or children.”
Tratt believes anyone wanting a comfortable retirement should have at least $1 million in their super account. SMSF Darren Howard’s financial planners also agree with this.
“You’ll probably get a nice vacation every year and maintain a lifestyle similar to what you used to work,” Howard said.
Howard says ASFA’s numbers may be valid for people living in cheaper parts of the country.
“These estimates try to find a balance between people who may live in rural areas and those who may live in urban areas. A ballpark figure like that is $1 million per person.”
Tratt warned that the ASFA figures could spell financial trouble if unexpected expenses arise.
“People may not spend all their money every year, but they just want the peace of mind that they can help their families, upgrade their cars, and do those things in retirement,” he said. rice field.
According to Tratt, those contemplating retirement should know that the sooner they start planning, the better prepared they will be for the future.
“Clients who want to retire next year come in all the time, but they should have looked to us five years ago to set themselves up. said.
