How much do I need to retire?
Plan ahead to make sure your hard-earned retirement fund lasts as long as you need it to.
Setting clear goals and understanding your finances is a great way to safeguard your retirement.
As most people can now expect to live well into their 80s, retiring at 65 means you'll need retirement income for 20 years or more. Understanding how much money you need to retire and your income sources is a great way to prepare for a comfortable retirement lifestyle.
How much you need to retire
You may have wondered, ‘How much will I need to retire?’ or ‘How long will my retirement funds last?’
The answer is different for everyone. The amount of money you’ll need in retirement depends on factors like:
- when you want to retire
- the life you plan to lead
- where you’ll be living
It’s a good idea to get advice from a qualified financial advisor on your personal circumstances, so you can plan with confidence.
💡Good to know: The Australian Government's Moneysmart website includes a handy retirement calculator to help you understand how much to save for retirement and how long your retirement funds are likely to last.
Your retirement income
So, how do retirement funds work? Understanding this is an important first step in retirement planning.
Superannuation, or 'super,' is the main way many Australians save for retirement. Throughout your working life, a portion of your income is contributed by your employer to your selected super account, where it's invested until you retire.
Comparing your current super balance to the average for your age is a good way to see if you’re on track. Once you know where you stand, you can explore ways to build wealth for retirement.
💡Good to know: The Moneysmart website has many helpful resources on how super works and how to grow your super. You may also want to check if you’re eligible for the Age Pension, government benefits, or seniors concessions.
Setting your retirement goals
Financial stability in retirement can grant you the freedom to live life on your terms. Creating a retirement plan is one way to set out your personal and financial goals so you have a roadmap for a fulfilling and rewarding retirement.
Start by asking yourself what you want your retirement to look and feel like. Whether you want to travel the world, pursue your hobbies, spend more time with family or give back to the community, your retirement savings should support your dreams.
Creating a retirement budget
A big part of retirement planning is setting up a realistic budget so you know where your money is going to be spent. This should cover daily living expenses, healthcare costs, one off splurges such as travel and emergency funds.
Keep in mind, you might need to spend less in retirement than you are in your working life. This is especially true if you've paid off debts like your mortgage and no longer have the costs associated with raising a family or maintaining a large home.
Getting help
Making informed decisions for your future is important. Here’s some resources to get your retirement planning on the right track and set up your fund for retirement:
- The Moneysmart website offers resources and tools for budgeting and retirement planning.
- Your superannuation fund will offer information on super income options.
- Visit Services Australia retirement years website for information on government payments and retirement planning.
- Check the Australian Taxation Office (ATO) website or consult a tax professional for tax-related matters.
- Consult a qualified financial advisor for professional guidance on retirement planning. Read more about getting financial advice.
For more information about the lifestyle and support offered at our retirement villages, call our customer service team on 1800 550 550 or send us an email here.
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