Is your super on track?

How much super do you need?  Do you have enough? Will you have enough?

These are the most common questions we get asked.  The answer's a personal thing. What's enough for one person will differ for another. The Association of Superannuation Funds of Australia (ASFA) provides a guide for how much a person needs for a modest or comfortable lifestyle in retirement.

ASFA considers that a comfortable lifestyle in retirement means you can have an annual holiday in Australia, eat out, buy good clothes and own a reasonable car. 

If this sounds like what you'll want when you finish work then it's a good starting point for what you'll need saved in your super.  If you think you'll want to do more (such as travel overseas every year), you'll need to save more. 

Are you on track?

ASFA says to fund a comfortable retirement as a couple you'll need $640,000^ saved in your super. For a single person you'll need $545,000.  TelstraSuper Financial Planning has provided a guide for how much you may need depending on when you want to retire and your annual income needs in the table below.  

A great way to see how your savings are tracking is to try our super savings calculator.  It'll give you an estimate of how much money you'll have saved when you retire.

See how much you'll have when you retire

 Retirement age*

56 60 65
 Annual Income  
$25,000 $480,000 $440,000 $385,000
$30,000  $570,000 $525,000 $460,000
$35,000 $670,000 $615,000 $530,000
$40,000 $765,000 $700,000 $615,000
$45,000 $855,000 $790,000 $700,000
$50,000 $955,000  $875,000  $770,000
$55,000  $1,050,000 $965,000 $855,000 
$60,000  $1,145,000 $1,055,000  $935,000 

^All figures in today's dollars using 2.75% AWE as a deflator and an assumed investment earning rate of 6 per cent. They're based on the means test.

* Assumptions
• single investor purchases a retirement income stream like TelstraSuper RetireAccess® and this is their only taxable income
• investor doesn't convert any part of their income stream to a lump sum or make additional contributions after retirement
• calculations are in year 2016 dollars based on a 'real' rate of return of 3.5% pa after 2.5% inflation (total return of 6% pa)
• taxation has been taken into account on the basis that the superannuation benefit used to purchase the income stream has no tax-free component
• calculations are based on personal income tax rates that apply from 1 July 2017 and allowance has been made for tax payable on income payments (assuming the 15% tax-offset is applicable)
• these amounts are within the annual income limits permitted by the Government
• the figures in the table are based on a full financial year and are applicable at the commencement of an income stream
• payments are indexed by 3% each year
• low income tax-offset has been included
• lump sums represent amounts required today at these ages to provide the stated income to age 85 with no residual capital remaining. Future performance is not guaranteed. Figures are an estimate only.

How you can achieve your goals

Once you know how much money you'll need each year in retirement, there are several things to consider when looking at how to achieve your goals:

  • when you want to retire and how long your income needs to last
  • your tolerance to investment risk
  • whether you may be eligible for Government assistance
  • other assets, and any lump sum withdrawals you are planning to take from your super.

What to do if your balance is lagging

If you think you need to boost your super, there are a couple of simple things you can do:  

Need help getting your super on track?

At TelstraSuper we’re here to help you build a secure financial future. TelstraSuper Financial Planning Advisers can help you get your super on track. If you’d like to discuss growing your super or your super account contact us on 1300 033 166 or by filling in our online contact form.  

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