How much should you have saved now for your retirement
March 29, 2017
How much you need for retirement is a personal thing but there are guides to help you determine how your super is tracking.
The ASFA retirement standard provides a guide to how much a person needs in retirement. They estimate the lump sum needed to support a comfortable lifestyle for a couple is $640,000 or $545,000 for a single person, assuming a partial Age Pension. This is based on owning your own home in retirement.
They also give a guide for how much you’d spend annually and weekly based on those lump sums. This is a good starting point, but how much you need is a personal thing and depends on many factors.
ASFA Retirement Standard | Annual living costs | Weekly living costs |
Couple - modest | $34,560 | $663 |
Couple - comfortable | $59,619 | $1,143 |
Single - modest | $23,996 | $460 |
Single - comfortable | $43,372 | $832 |
How much do you need now?
The most common question we get asked is how much should I have saved now to be on track for a comfortable retirement?
Here is a guide* that can help you determine how you are tracking now towards supporting a retirement that allows you to maintain your lifestyle.
- at age 35, you should have saved an amount equal to your annual salary
- at age 45, you should have saved three times your annual salary
- at 55, you should have saved five times your salary
- when you retire at age 67, you should have eight times your annual pay
As an example - someone who is 45 and earning $90,000 a year should have saved around $270,000 now (if super is your main form of savings this is a guide for how much you should have in your super). This is just a guide but it allows you to get a feel for how your current savings are tracking.
Another rule of thumb is at retirement you’ll need 67%^ of your salary as an income when you retire. So if you’re earning $100,000 you would need an income of $67,000 a year to support your retirement.
Work out what income you may have at retirement
If you want to see how much super you may have at retirement, try our retirement income projector – if you plug in your age, salary and current super balance it will give you an estimate of how much you’ll have as a lump sum and as an income when you retire.
Want to boost your super?
If after seeing these guides and trying the projector you feel you need to boost your super, it’s easy to do. If you work at Telstra you can use People Express to start making contributions from your salary. When you do this on an ongoing basis you barely notice a difference in your regular pay. If you don’t work at Telstra, speak to your payroll department and they can set you up.
Learn more about making contributions
Need some help?
We can help you set up a regular contribution plan that won’t affect your lifestyle. You can receive advice about making contributions over the phone at no additional cost from TelstraSuper Financial Planning. You can speak to a TelstraSuper Financial Planning Adviser by phoning 1300 033 166 or request a call back by filling in our online contact form.
Sign up for our contributions webinar
We are also running webinars on 4 and 5 April about the benefits of making contributions into your super. The webinars run for about 45 minutes and can be accessed from your PC. There is also an opportunity to ask questions at the end of it.
*http://business.time.com/2012/09/21/what-you-should-save-by-35-45-and-55-to-be-on-target/
^https://www.moneysmart.gov.au/superannuation-and-retirement/how-super-works/super-contributions/how-much-is-enough