How much superannuation do you need?

The ASFA Retirement Standard forecasts that when you stop working you will need $545,000 to enjoy a comfortable lifestyle* through retirement.

Needs and circumstances change throughout life; regularly review your superannuation plan to ensure that your fund’s investment strategy reflects your current circumstances. Consider talking to a professional financial planner about how to grow and protect your wealth.

 

In determining how much money you need, it may be useful to consider the following factors:

1. How long you will live

While it’s obviously impossible to determine your lifespan, you can generally expect to live for many years after retirement. This means that your superannuation may need to last a long while.

2. Your lifestyle

Obviously, the type of lifestyle that you lead makes a big difference in terms of how much superannuation you will need on retirement. Think carefully about the expenses you have - consider which are fixed, and which are discretionary (these may change by retirement). It’s also worth thinking about any ideas or plans you have for your retirement - including travel, or new memberships or hobbies. After working for so many years, it’s important to enjoy your retirement.

It can make sense to try scaling back your expenses in the years nearing retirement so that you are prepared for a more modest lifestyle before you are necessarily required to.

3. Medical expenses

It’s a reality that our medical expenses are likely to increase as we get older. So it’s important to factor these expenses into your overall thinking regarding your superannuation.

Determining how much superannuation you are going to need for your retirement will obviously vary depending on your personal circumstances.

 

Take a look at BT’s retirement income calculator.

You simply need to input some details about yourself and your retirement savings, and our calculator will do the rest. Once the projections have been made, you can adjust the sliders to view the effects of various behaviours on your account balance and income. The entire process should only take around five minutes. It can help if you have the details of your superannuation funds handy while you’re entering your information.