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This month we've been talking all about retirement! We've spoken all about the importance of planning for your retirement, how to save and invest, and the importance of deciding what kinds of activities you will take part in after hanging up the tools. This blog will help you work out exactly how much you need to put away.

retirement

Length of retirement

Most facts and figures will allow for a 20 to 25 year retirement, so this must be kept in mid when looking at your superannuation fund and doing research. It is important to note that, while the retirement age in Australia is rising, so is the life expectancy. We always recommend erring on the safe side, so if you are ever in doubt, put away more than you think you will need.

Lifestyle

The second point to consider is what kind of lifestyle you want to lead in your retired years. This will make a huge impact on how big a sum you will need in your superannuation fund, or when pooling your investments.

The Figures

Below is a generally helpful formula used by most superannuation funds and banks than you can use as a guideline.

retirement guide figures moneysmart

Retrieved from https://www.moneysmart.gov.au/

The above table assumes you own your home, and is a template for someone who retires at 65 and lives until age 85. If these assumptions do not apply to your circumstances, you can make a more personalised calculation by working out 67% of your current income, as that is said to give a good indication of how much you will require per year during retirement.

retirement lifestyle planning

Planning

Some people like to take matters into their own hands when planning their retirement, but others might prefer to use a calculator to work out an exact formula. Another option, of course, is to speak to a professional about making plans for your financial future. Keep in mind that any automated planner or calculator will only be able to work on the figures you provide, so if you're planning a retirement full of travel and getaways, be sure to budget that in!

Happy planning!

 

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