Would you like to retire comfortably and be financially independent? Unfortunately, 63% of Australians retire without planning for this goal.
Our team at Scope Wealth Management is not about scare mongering, we are all about providing you with the support, tools and structure you need to reach your goals.
That’s why we would like to share some revealing statics about retiring in Australia.
How much do you need to retire at age 65?
We want you to start thinking about what you want your retirement to look like; for you and your family. We’ll be here every step of the way to help you reach these goals.
Many Australians, up to 74%, retire with only $24,000 per year income and rely on a government pension to fund their retirement.
We understand that you want a financially independent and comfortable retirement. As the cost of living continues to trend upwards, it is important you understand how much money you will need in order to enjoy your retirement.
Average Australians live into their mid 80s. Retiring at 65 means you should aim for around $1.2 million to live comfortably through your retirement.
Ultimately, how much you might need will depend on a range of factors, including:
- your desired lifestyle,
- the legacy you want to leave,
- the possibility of accessing the age pension,
- how long you might live, and
- your risk profile.
It is definitely possible to live a nice life on less. However, many people aspire to have a retirement that is active and filled with adventure, choice and freedom. To guarantee certainty around this requires significant capital, so it is important to set goals and start planning early.
Planning for your retirement lifestyle
Start thinking about what your retirement is going to look like.
- Does it include renovating your home?
- Will you be travelling?
- Do you want to pay off your mortgage or rent a property?
- It is also a good idea to consider any future medical costs.
What lifestyle do you envisage for you and your family?
If you own your own home, you can expect to need two-thirds of your pre-retirement income. This will enable you to continue through retirement maintaining your current standard of living.
Industry standards provided by the Association of Superannuation Funds of Australia (ASFA) break down lifestyle options into two categories. Each category is applicable to people retiring at 65 with a life expectancy to around 85. It is based on the assumption that you will own your home.
Modest – aims to predict how much money will be needed to over the “basics”.
Comfortable – aims to predict how much money you will need to include leisure activities, private health insurance, a reasonable car and holidays.
There is more information available on these estimates at the moneysmart.gov.au website. https://moneysmart.gov.au/glossary/asfa-retirement-standard
The ASFA website also contains a lot of helpful retirement budgeting tools. https://www.superannuation.asn.au/resources/retirement-standard
Budgeting for your retirement
Investments are an important part of building your retirement income. Your home and other assets outside of your superannuation are also contributing factors to your retirement nest egg.
There are some steps you can take to start building your superannuation in preparation for funding your retirement lifestyle.
Consolidate – Grow – Review
- Consolidate your superannuation into a single account, this will ensure you are paying fewer fees.
- Grow your superannuation my making extra contributions.
- Review your superannuation investments annually and make changes as required.
There is a lot of information and help available to set you on course for your retirement planning.
Contact us for an obligation fee consultation and start planning for your financially independent retirement now.
Invest in your future today, enjoy your independence tomorrow.
Craig – Mobile 0437 110 000