Most of us, when we think about it, know what a comfortable retirement looks like. It probably includes travel to exotic places, time with family and doing things we have never done before, with enough money in the bank to not worry about finances.
According to The Association of Superannuation Funds of Australia’s (ASFA) latest report, Australian individual retirees who desire a ‘comfortable’ retirement will need to have saved a minimum of $545,000 by the time they are ready to retire at age 67. For couples, the figure is $640,000.
Since 2004, ASFA has been developing and updating this estimated retirement minimum, which is based on retirees’ spending requirements as well as in-depth statistics on consumer spending and earning trends, to help people prepare for life after work.
However, Tasmanians shouldn’t be unduly alarmed by this calculation. The fact is it is almost impossible to predict exactly how much money you will need for your retirement. There are many small variables that make each person’s retirement unique, not to mention superannuation and tax rules, as well family and personal health situations that could change as you approach the end of your working life.
The best way to determine how much you’ll need to thoroughly enjoy a comfortable retirement is to get in control of your financial situation and build a blueprint of what the perfect retirement looks like for you.
The first step is to understand your basic living expenses, and then everything else you spend money on. The next should be to consult an expert. A professional financial planner can help you truly understand your finances and, more importantly, what you need to do to achieve the retirement lifestyle you want and can reasonably afford.
Putting yourself in the best possible financial position is key in achieving your retirement dreams without having to rely on the Age Pension to subsidise your post-work life. Your superannuation is only one avenue towards achieving your retirement goals and there is already a cap on how much you can contribute in one year.
A financial planner will walk you through the different saving strategies available at different stages of your life, putting you in a favourable position when you inevitably decide to exchange the suit or high heels for a Hawaiian shirt and thongs.
So, what does all this mean for the average Australian entering retirement? While some may be surprised at the size of ASFA’s minimum nest egg, for many this will be achievable. ASFA’s minimum retirement amount for a ‘comfortable retirement’ includes provision for an annual holiday, and enough spending money to enjoy regular outings to your favourite restaurants, wear the latest fashion, improve your home and have private health insurance.
However, to make sure you are taking the right steps towards a comfortable retirement get the advice of an expert. In Tasmania, there are a range of professionals available who can give financial advice as you prepare for retirement. Call MyState Wealth Management today on 1300 651 600 to find out more.
Information is current as at 23 August 2017. This is general advice only, before making any decisions please speak with a MyState Wealth Management Financial Planner.