Feel like retiring but not sure when you'll be able to? It helps to know if you'll have enough savings to provide an income that will give you the lifestyle you want in retirement and if not, how you plan to achieve this.
We all have goals in life. For some they are small, such as eating healthier and exercising or saving for a holiday, while for others they are large like starting a business or retiring comfortably.
But regardless of whether your goals are big or small, planning ahead and understanding the steps you need to take today and in the future is an important part of making your dreams a reality.
Most people need some assistance to develop a retirement plan. For some it’s simply that they don’t have the time or expertise to put a financial plan in place, while others may just need help getting started and having someone to check in with every now and then to ensure they are still on track.
Want to know more about financial planning? Head to the retirement section of our new online e-learning platform eisuper.com.au/MoneyMatters and take a look through our financial planning module today.
Super is money put aside while you’re working that will be used to fund your lifestyle when you retire. Your super grows over time and you can access it when you retire and reach your preservation age – which ranges from 55 to 60 depending on the year you were born1 or when you reach age 65.
While many Australians rely at least partially on the Age Pension in retirement, it’s not a lot of money and is unlikely to support the lifestyle most of us want in retirement.
If you want to travel overseas, drive a reasonable car and regularly eat out in retirement, you’ll need to have enough put aside in your super to pay for a higher standard of living.
The Association of Superannuation Funds of Australia (ASFA) Retirement Standard estimates an individual requires $27,913 a year to live modestly and $43,787 to live comfortably in retirement. For couples, these amounts are $40,194 and $61,786 respectively.2
A couple retiring today at age 65 and owning their own home would need a lump sum of around $640,000 to pay for a comfortable lifestyle in retirement while an individual would need about $545,0002. At these savings levels, a part Age Pension could still be used to help meet your income needs (depending on your other assets).
Without a part Age Pension to rely on, retirees would need significantly higher savings to support a comfortable lifestyle.
To figure out when you can retire, you'll need to do some calculations:
To retire at the age you want and lead the kind of retirement lifestyle you desire, you need to take some steps today to ensure you have enough super in the future. Here are a few key tips:
How soon you can retire is entirely up to you - and your super! To find out more about how to boost your super, make an appointment with an EISS Super Financial Planner.
1 Refer to ato.gov.au for preservation age brackets.
2 ASFA Retirement Standard, 2018.
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