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The Association of Superannuation Funds of Australia (ASFA) has recently released their latest Retirement Standard. If you see yourself living a ‘comfortable’ retirement, find out how much income from super you might need to achieve this lifestyle.
The latest ASFA Retirement Standard calculates that for people aged between 65 and 85, a single person who owns their own home would likely need a retirement income of $43,695 per year to live a comfortable retirement. A couple would likely need an income of $60,063 per year for a comfortable retirement.1
Whether you are just starting work or moving towards retirement, those figures could affect the plan you currently have in place for your future.
You can find more details about the Retirement Standard on the ASFA website, including figures for incomes for comfortable and modest lifestyles, singles and couples, early years and later years in retirement, and the assumptions they used.
A comfortable retirement is a subjective question, as one person’s luxury is another’s making do.
However, in the context of the ASFA Retirement Standard, a ‘comfortable’ retirement is a step up from ‘modest’, which in turn means being able to afford basic activities above a retirement on the Age Pension.
In contrast, ‘comfortable’ retirement means you can be involved in a broad range of leisure and recreational activities, have a good standard of living, and are able to afford things such as:2
To establish whether the ASFA Retirement Standard is a good guide for your retirement needs, we need to examine the figures used to get to the $60,063 per year for a couple.
ASFA provides the
detailed budget breakdowns on their website, however we have included here some of the bigger ticket items.
General household bills are the first thing to factor into future budget, as for the most part they are non-negotiable. They are also the easiest to compare against your current expenditure.
The table below shows the costs of common weekly bills used in the Retirement Standard for a couple aged 65 - 85 living a comfortable retirement. Please note that all figures are rounded to the nearest dollar.
Whether it’s your first day on the job or your last, you can check your super balance.
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Our Retirement Income Calculator shows you what super balance you’re tracking towards, and what income that balance will likely give you.
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When it comes to discretionary spending, the ASFA figure covers a range of expenses. Some of these expenses might be vital to you, some may not be on your list.
The ASFA Retirement Standard assumes, for example, that a couple will spend just over $3 per week on cosmetics and personal care items, around $8 per week on newspapers and magazines, and $12 per week on household appliances.
Around $136 per week is allocated to car transport and running costs, and around $5 for public transport. These figures will naturally vary for retirees who rely solely on public transport or taxis to get around.
When it comes to leisure, the Retirement Standard looks at things like eating out, holidays, and activities. For example, it assumes around $81 per week on lunches and dinners out for a couple on a comfortable retirement income.
Another $14 per week is allocated for attending cinemas, plays, sport events, and taking day trips. That’s enough for an AFL membership at the time of writing.3
It assumes $78 for domestic vacations, which is $4,048 per year to spend on local holidays. At the time of writing, a couple could take a seven-day Adelaide to Alice Springs tour for that amount, and still have cash left over to buy the plane tickets to get home when the tour was finished.4
In addition, the Standard allows $55 per week or $2,860 per year for overseas holidays. That could mean, according to Expedia at the time of writing5, a couple could spend five nights in Malaysia, Vanuatu, or Cambodia. Or you could save up and travel overseas every few years to visit more far-flung destinations.
As a QSuper member, you have access to tailored personal financial advice to help get all your money working harder for you now.6
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1 All figures quoted sourced from the ASFA Retirement Standard, June quarter 2017 report, https://www.superannuation.asn.au/resources/retirement-standard
2 ASFA Retirement Standard.
3 AFL membership costs current at 30 November 2017, https://membership.afl.com.au/become-member-0
4 Intrepid Travel, 30 November 2017 at https://www.intrepidtravel.com/au/australia/adelaide-alice-springs-overland-102144
5 Expedia, accessed 30 November 2017 at https://blog.expedia.com.au/listopedia-best-bali-swaps/
6 Advice fees may apply
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