When we’re asked how much super a client may need to retire comfortably, we often find that (what are on the surface) even the most simple questions, are frequently the hardest to answer! While there is a huge range of resources out there to help you to understand ‘how much is enough’, the truth is, your own objectives and goals are crucial to the equation!
I like to start by talking about your spending plans. What does your ideal lifestyle look like in retirement? Are you and your partner going to become global travellers, or are you planning to jump into a motorhome and travel across Oz? Are you going to relocate to another city, or continue to oversee the family business from your current home? As you start to document your ideal lifestyle, it becomes much easier to get a strong understanding of what that lifestyle might cost.
The next discussion to be had is around your health. While sometimes an uncomfortable discussion, it’s important to understand at what age you’d like to retire, and what the average life expectancy is of people your age. Today, a 45 year old male is expected to live to age 81, whereas a 45 year old female, is expected to live to age 85. If you’re particularly healthy, it’s entirely possible that you could live into your mid 90’s, so that’s an important part of the equation.
When considering your extended family, do you aspire to support them financially? Whether it’s paying off a family car, or putting a dint in the mortgage, you should be thinking about how much you’d like to have in savings to provide financial assistance to those around you?
Each of these variables all play an important part in understanding how much is enough.
Finally, are you thinking about supplementing your savings with the Age Pension? The basic Age Pension is just over $20,000 for a single person, and $33,000 for a couple. The single age pension now represents just 27% of male total average weekly earnings. 27% of the average Australian’s income isn’t a lot to live off, so it’s important to be prepared.
If you’d like to have a chat about your retirement plans, your superannuation, and how long it will last for you, click here, or give the team a call on 07 4783 5151.