Therefore, before making any decision, you should consider the appropriateness of the advice in regard to those matters. 232706).Īny advice contained in this website is of a general nature only and does not take into account the objectives, financial situation or needs of any particular person. Jade Financial Group ABN 74 109 203 018 trading as Jade Financial Group is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited (Australian Financial Services Licence No. Get in touch on 07 3202 2470 if you would like to discuss your retirement strategy. These are challenging times to be embarking on your retirement journey, but a little planning now could put you back in the driver’s seat. You might also consider delaying retirement which has the double advantage of allowing you to accumulate more savings and reduce the number of years you need to draw on them. You may also be able to make after-tax contributions of up to $100,000 a year or, subject to eligibility, $300,000 in any three-year period. If you have the means, you could make additional super contributions up to your concessional cap of $25,000 a year. If there’s a gap between your retirement dream and your financial reality, you still have choices. There are many online calculators to help you estimate your retirement balance, such as the MoneySmart super calculator. Then work out how much you are likely to have by the time you hope to retire if you continue your current savings strategy. Subtract your debts, including outstanding loans and credit card bills, to arrive at your current net savings. This assumes you earn 6 per cent a year on your investments, draw down all your capital and receive a part age pension.Īdd up your savings and investments inside and outside super. Couples would need a lump sum of $640,000 and singles would need $545,000. Using the ASFA benchmark for a comfortable lifestyle, say you hope to retire at age 65 on annual income of $62,000 a year until age 85. Once you have a rough idea what your ideal retirement will cost, you can work out if you have enough super and other savings to fund it. The challenge is to ensure your money lasts the distance. Today’s 65-year-olds can expect to live to an average age of around 85 years for men and 87 for women. Then there is the ‘known unknown’ of how long you will live. As you can see, this doesn’t stretch to ASFA’s modest budget, let alone a comfortable lifestyle, especially for retirees who are paying rent or still paying off a mortgage. To put these figures in perspective, the full age pension is currently around $24,550 a year for singles and $37,013 for couples. i Of course, comfort is different for everyone so you may wish to aim higher. It provides sample budgets for different households and living standards.ĪSFA suggests singles aged 65 would need around $44,183 a year to live comfortably, while couples would need around $62,435. To get you started, the ASFA Retirement Standard may be helpful. That’s because it’s generally cheaper to live in retirement, with little or no tax to pay and (hopefully) no mortgage or rent. It’s often suggested you will need around 70 per cent of your pre-retirement income to continue living in the manner to which you have become accustomed. Do you want to eat out regularly, play golf, and lead an active social life or are you a homebody who enjoys gardening, craftwork or pottering in the shed?Īlso think about the cost of creature comforts, such as the ability to upgrade cars, computers and mobiles, buy nice clothes, enjoy good wine and pay for private health insurance. Maybe you want to holiday overseas every year while you are still physically active or buy a van and tour Australia. Your retirement spending will depend on your lifestyle, if you are married or single, whether you own your home and where you want to live. The best place to start is to think about your future income needs. You may even find you’re in better financial shape than you feared, but you won’t know until you do your sums. Whatever your circumstances, a financial tune-up may be required to get your retirement plans back on track. You may be concerned about a drop in your super balance, insecure work, or an uncertain investment outlook. After a year when even the best laid plans have been put on hold due to COVID-19, people who were planning to retire soon may be having second thoughts.
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