How much will you need to retire? This question concerns all of us. We want to enjoy life now, but we also want to enjoy retirement. Yet we are are often attempting to predict 20 years into the future.
Most people would say they do not want to reduce their life style when they retire. Indeed many actually will spend more when they retire. They want to keep their home, continue to enjoy the amenities they use now, but also have additional money to go on holidays. I have not spoken to many people who say “When we retire - we want to live on half of what we spend now!”
So a typical person may well want $60,000pa to spend when they retire at age 65. If this is you then the table below may give you some indication as to whether you are on track to achieving this goal.
| Current Age |
Required Super Balance |
|
30 |
$70,000 |
| 35 |
$115,000 |
| 40 |
$170,000 |
| 45 |
$235,000 |
| 50 |
$320,000 |
| 55 |
$425,000 |
| 60 |
$550,000 |
Many people now days are using investment properties instead of superannuation with the idea of the investment property funding their retirement. If this is you then simply use the net asset value and compare this amount to the table above. For example if your property is worth $400,000 and you owe $300,000 on it then your net value is $100,000.
Often people look at these numbers and can’t believe they will every need this much, but remember, inflation over 20 years means you will need more than you think in retirement, $60,000pa today may well be the same as $80,000pa by the time you retire.
If you are a typical investor and your superannuation is below these amounts, then we urge you not to panic, but please ring our office to discuss your situation in detail. Remember there are strategies that we can put in place to dramatically improve your position, however the sooner you address the situation the less pain for everyone.