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Everyone has a different idea of what they want to do when they retire. For some people, it's about action, adventure, and travel. For others, it's about relaxing, reconnecting, or spending time with grandchildren. It's important to think about the kind of lifestyle you'd like when planning for your retirement.
No matter what life after work holds, your superannuation will probably make up a large part of your retirement income. A key part of planning for your retirement is estimating how much super you might need and deciding if that's enough or if you'd like to make extra contributions. Remember, it's never too early (or late) to make a difference to your super.
The Association of Superannuation Funds of Australian (ASFA) has put together a Retirement Standard, which outlines the annual budget required to fund either a modest or comfortable standard of living. This can be used as a benchmark to help you begin planning your retirement.
According to ASFA, a couple aged between 65 and 85 would need about $67,000 and a single person about $47,000 a year to live a "comfortable" lifestyle in retirement.1 This includes a broad range of leisure and recreational activities, health insurance, occasional overseas holidays, and assumes you are healthy and have paid off your home. A ''modest'' retirement lifestyle is considered better than the Age Pension but still only able to afford basic activities, with a similar aged couple needing about $43,000 and singles about $30,000 a year.
Another important part of planning for your retirement is keeping up to date with how much super you have. Even if you're not able to access your super for a while, you should have a good understanding of how much your employer is contributing and whether you need to make additional contributions to ensure you're on track for retirement.
You can view your account balance through Member Online, 24 hours a day, seven days a week. Your annual statement also outlines all the activity associated with your QSuper account/s and will show your super balance as at 30 June of the relevant year. If you have an Accumulation account, your annual statement should have a projected estimate of what your super balance might be when you retire, based on your investment strategy.
Keeping up to date with your investment strategy is also an important part of the retirement planning process. If you're with the QSuper default investment option Lifetime, your investments are automatically personalised based on your age and account balance. However, if you decide to take control of your own investments, you'll need to regularly review your strategy to ensure the risk and timeframe are still aligned to your retirement goals.
To gain a better understanding of how much super you could have in retirement, use our Retirement Income Calculator. This tool can help you check if you're on the right track to retire or if you should consider making additional contributions to help grow your super.
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1. Source: ASFA Retirement Standard, June quarter 2022.
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