When it comes to superannuation, every dollar counts. Many Australians don’t realise that their employer’s superannuation contributions may not be enough. Especially if you are concerned about living a comfortable and financially secure lifestyle in retirement. So how much superannuation do you need to retire?
The amount that you are should save for retirement depends on multiple factors including your family dynamics and your lifestyle choices. If you are aspiring towards a retirement lifestyle that includes a few luxury holidays every year, then your savings will need to be significantly higher. This compares to those who are happy living their normal lifestyle when they decide to leave the workforce.
Annual cost of living
According to ASIC, annual living costs for a couple living a modest lifestyle are $39,353. This compares to $60,264 for a comfortable lifestyle. Overall, this equates to $640,000 of superannuation to retire with a comfortable lifestyle.
Since 2014, employers in Australia are required to pay a 9.5% contribution. However, this contribution was just 3% in 1992 when many baby boomers were in their prime working days. This small percentage has ultimately disadvantaged many Australians in being able to afford to retire comfortably. As a result, strategies need to be put in place to ensure that superannuation is a priority. You can do this by increasing superannuation contributions or consolidating your superannuation into one account, for instance.
How much superannuation will I need?
Our APS Financial Planners will help you feel at ease as you start to plan your retirement. Find out more here.