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Author: Darryn Thode

How much do you need to live comfortably in retirement?

How much do you need to live comfortably in retirement? It’s a common question but one that can be quite difficult to answer! How much you will need in retirement depends on many things including the lifestyle you choose, any unexpected costs that crop up, and how long you live.

Living Longer

Due to medical advances, Australia’s population is ageing. And, living longer means there’s more time to be spent in retirement.

With more time in retirement, you’ll need to have a plan in place not only to make sure you can do the things you want, but to ensure that your money lasts as long as you do.

Did you know… a woman aged 65 years could expect to live another 21.8 years while a man aged 65 years could expect to live another 18.9 years.^

What lifestyle will you choose?

Many people don’t put a retirement plan in place because they think they can rely on the age pension. However, the age pension is unlikely to provide the lifestyle that you’d choose for yourself. For example, the age pension payment is equivalent to $421.40 per week for a single person and $635.30 per week for a couple. Compare this to the cost of a modest or comfortable lifestyle below.

Lifestyle and status Modest:  single Modest: couple Comfortable: single Comfortable: couple
Housing – ongoing only $63.75 $61.19 $73.88 $85.65
Energy $43.58 $57.87 $44.22 $59.97
Food $75.86 $157.15 $108.38 $195.08
Clothing $17.58 $28.54 $38.05 $57.08
Household goods & services $26.18 $35.50 $73.65 $86.28
Health $39.58 $76.39 $78.52 $138.59
Transport $96.80 $99.54 $144.25 $146.99
Leisure $73.57 $109.60 $222.94 $305.51
Communications $9.63 $16.85 $26.46 $33.67
Total per week $446.52 $642.64 $810.36 $1,108.83
Total per year $23,283 $33,509 $42,254 $57,817

Source: ASFA retirement standard survey March 2014. The figures in each case assume that the retiree(s) own their own home and relate to expenditure by the household. This can be greater than household income after income tax where there is a drawdown on capital over the period of retirement. Single calculations are based on female figures.

^ Source: ABS January 2012 (based on the period 2008-2010)

What does your retirement dream look like?

Do you want to be able to afford, and maintain, a reasonable car, a wardrobe of nice clothes and the latest electronic equipment? And what about being able to participate in a range of leisure and recreational activities or treating yourself to domestic, or occasional overseas holidays?

If this is your idea of retirement, then you need to aim for a comfortable lifestyle. In other words, a lump sum in the region of $510,000 for a couple or $430,000 for a single person *.

  Annual Amount Annual Amount
Lifestyle Single Couple
Age pension $21,913 $33,035
Modest Retirement $23,282 $33,509
Comfortable retirement $42,254 $57,817

*Source: ASFA retirement standard survey December  2013. For more information and the latest figures visit the ASFA website

Are you on track for a comfortable retirement?

To find out how you can boost your super, make an appointment with a Bridges Financial Planner.

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