Estimate how much super you’ll have

MoneySmart
(ASIC)

 

Take some of the guesswork out of planning for the future. Work out how much super you’ll have when you retire, and if it will be enough to fund the lifestyle you want.

It’s never too soon to start planning for a better financial future.

Estimate how much super you’ll have

You probably know how much super you have now, but do you know how much you’ll have when you retire?

Use the Moneysmart retirement planner to estimate:

  • how much money you’ll have to spend each year once you retire
  • how fees, investment options and contributions will affect your retirement income

You can also use the planner to test out different scenarios and work out how to grow your super.

How much super you’ll need when you retire

The amount of super you’ll need when you retire depends on:

  • your big costs in retirement, and
  • the lifestyle you want

Most people can now expect to live well into their eighties. This means that if you stop working at 65, you’ll need retirement income for 20 years or more.

You might be nervous about your investments or super at the moment. But don’t make any rash decisions based on falls or gains in the markets.

Find out the steps you can take to make well-informed investment decisions.

Your big costs in retirement

Think about any big costs that might be part of your retirement plans. For example:

  • paying off your mortgage
  • rent
  • renovating your home
  • travel
  • medical costs

The lifestyle you want

Think about how you plan to spend your money in retirement. If you own your own home, a rule of thumb is that you’ll need two-thirds (67%) of your pre-retirement income to maintain the same standard of living in retirement.

The Association of Superannuation Funds of Australia (ASFA) provides an industry retirement standard. This estimates how much money you’ll need, depending on your lifestyle.

ASFA Retirement Standard Comfortable lifestyle Modest lifestyle
Single $43,687 a year
$837 a week
$27,902 a year
$535 a week
Couple $61,909 a year
$1,186 a week
$40,380 a year
$774 a week

Source: ASFA, June quarter 2020

ASFA estimates that the lump sum needed at retirement to support a comfortable lifestyle is $640,000 for a couple and $545,000 for a single person. This assumes a partial Age Pension.

ASFA estimates that a modest lifestyle, which covers the basics, is mostly met by the Age Pension. They estimate the lump sum needed to support a modest lifestyle for a single or couple is $70,000.

Build up your super

Many things contribute to your income in retirement, including investments outside of super and assets such as your home, especially if you downsize.

If you decide it is important to build your super, there are some actions that can make a big difference over time. Think about:

If you don’t have as much as you’d like, it’s never too late to build up your super to boost your retirement savings.

Throughout your working life, check your super at least annually. Check your fund has the correct personal details and tax file number (TFN). Review your employer’s contributions, and your account fees, investment options and insurance. If you’re not satisfied or don’t understand any details about your fund, call them and ask questions.

If you need financial advice

Planning for your retirement is complex, and everyone’s situation is different. Think about getting personalised advice from a financial adviser to help you plan ahead. Many super funds also provide this service.

 

 

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