How Much Money Do I Need To Retire Comfortably? 

When it comes to retirement one of the number one questions we get asked is how much money should I realistically have to retire comfortably? And the truth is, there really isn’t a one-size-fits-all answer for every single individual. 

Working out exactly how much you will need for a comfortable retirement depends on a range of different factors including your lifestyle, plans for the future and the number of years you will spend retired living off your retirement fund. 

Figuring out exactly how much money you will need to comfortably require also depends on your Super and any investments or assets you have, here’s a rundown on how much you may need to retire, and the factors that you’ll need to consider whilst planning for your retirement. 

So how much is enough? 

As per the 2023 Association of Superannuation Funds of Australia (ASFA) Retirement Standard, there are two different budgets for households and living standards per year for individuals aged between 65 and 84 years old. 

For a couple, this means that for a comfortable lifestyle you will need about $72,150 per year and if you were happy living a more modest lifestyle, you would need roughly $47,000 per year. 

These figures are obviously a bit less if you’re a single, with singles needed around $52,000 per year to live comfortably and around $34,000 a year to live a more modest lifestyle.

If you’re not quite sure what the difference between a modest lifestyle and a comfortable lifestyle is, think of it this way: A modest lifestyle is considered better than living on the age pension,  but a comfortable lifestyle means you have a good standard of living and can partake in a range of leisure activities as well as international, and domestic travel. 

How do I know if my retirement expectations are reasonable? 

When it comes to retirement planning and figuring out how much money you’ll need to retire, it ultimately is a very unique and personal thing that also depends on how you would like to live and your lifestyle expectations for retirement. 

When trying to figure out how much money you will need to retire, it would be best to figure out exactly how much money you spend on everyday items, recreational activities and any hobbies you may have to factor those things into your considerations. 

How long will you be retired?

Obviously the amount of money you will need depends on how long you are planning to be retired, for example if you plan to retire when you are 65, it’s likely you’ll live for at last another 20 years so you will need to have enough funds to cover yourself and your lifestyle for at least that amount of time, plus some wiggle room! 

How will I get money during retirement? 

The money you use during your retirement doesn’t solely come from savings you have built up alone, there are a number of different sources you might receive money from during your retirement. 

Your Superannuation 

One of the number one things you need to know when planning your retirement is how much Super you have in your Super fund as this will generally be a very large part of your retirement savings.

The Age Pension 

Depending on your individual circumstances you may be eligible for a full or part age pension during your retirement. You will need to check the eligibility criteria though as some individuals may not be entitled to any form of government assistance or pensions at all. 

Investments, savings & inheritance 

There are a few different ways you can get funds to retire, whether it’s downsizing your home, selling investment properties or shares or using money you’ve saved in a savings account. If you have received any money in inheritance from your family over the years you may also be able to use this to fund your retirement. 

If you want to chat about your unique financial situation ahead of your retirement, seeking independent financial advice from a trusted advisor is a great place to start. 

I don’t think I’ll have enough to retire, now what?

If you’re facing financial difficulty ahead of retirement, there are a few different ways you can get your retirement on track. Having an idea of your current and projected retirement savings is a great place to start so you can work on improving your overall financial situation. The sooner you start putting money aside for retirement, the easier it will be for you to reach the financial goals you have for retirement. 

If you need any further guidance on retirement planning or how much money you should have for retirement you can contact a member of our team at Allied Wealth today to see how we can help you reach your retirement goals! 

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