How long will my super last in retirement?

No matter how old you are, it’s important to ask how to make your super last in your retirement.

Having a healthy super balance could play a deciding factor in what sort of retirement lifestyle you will have in the future.

As life expectancy rises¹ and potential increases to the cost of living start to bite, you may need more money for retirement than you think.

Taking time out to identify any gaps now means you may be able to explore different options to boost your super and achieve a more comfortable retirement.

Q: How much super do I need to retire comfortably?

A: The Association of Superannuation Funds of Australia (ASFA) has created a Retirement Standard to help give people a clearer understanding of what retirement lifestyle their savings will give them.

It is updated quarterly to reflect inflation and provides detailed budgets of what singles and couples would need to spend to support their chosen lifestyle.

For a ‘comfortable’ retirement, ASFA’s September quarter 2020 estimate is that single people will need $43,901 in retirement savings per year, and couples will need about $62,083 per year.²

A comfortable retirement may include:

• A range of leisure activities
• A reasonable car
• Good clothes
• Eating out regularly in restaurants
• One annual holiday or occasional international trips
• Money for home repairs and utilities.

Q: How much super do I need to retire modestly?

A: To retire modestly, the ASFA September 2020 estimate is that single people aged about 65 will need about $27,987 a year and couples will need about $40,440, per year.²

A modest retirement may include:

• Infrequent leisure activities on occasions (e.g. going to the movies)
• A basic or cheap car
• Reasonable clothes
• Occasional takeaway or modest restaurants
• One or two short local holidays
• Limited budget for utilities.

With a modest retirement lifestyle, you can afford all the essentials with the occasional small splurge, but it will require you to be more careful with your money.

Q: What happens if I'm renting in retirement?

A: As a result of circumstance or choice, you may not own a home in retirement. This can present some challenges for retirees, as this will increase your lifestyle costs.

Consider speaking to a financial advisor to assess how renting may affect your lifestyle in retirement.³

Q: What if my super balance is less than I expected?

A: As a result of circumstance or choice, you may not own a home in retirement. This can present some challenges for retirees, as this will increase your lifestyle costs.

If your super balance doesn’t match your expectations, there are still plenty of things you can do to grow your super for retirement.

• Consolidate your super accounts

You may have worked multiple jobs and have super sitting in a variety of super funds. Finding and consolidating lost super into one account could help you save money on fees and your retirement funds grow.⁴ Consolidating your super can be quick and easy to do.

• Salary sacrifice

A great way to grow your super balance is to salary sacrifice. This means a portion of your pre-tax salary goes directly to your super account. Salary sacrifice benefits could also have potential tax benefits, all while contributing to your super.

Salary sacrifice isn’t for everyone, so it’s important to learn if it’s a suitable option for you. Find out more by downloading the Personal Contributions Guide (pdf).

• Review your investment strategy

Your super is an investment in your future. Look after your retirement savings with the right investment strategy for you.

With QSuper, you can choose from a range of investment options, such as:

• Lifetime
• Diversified and single sector
• Self-invest.

When it comes to choosing the best super investment strategy for your needs, getting some professional financial advice can help.

1. Australian Bureau of Statistics, 3302.0.55.001 - Life Tables, States, Territories and Australia, 2016-2018, https://www.abs.gov.au/ausstats/abs@.nsf/mf/3302.0.55.001, accessed 20 January 2020.
2. All figures quoted sourced from the ASFA Retirement Standard, September quarter 2020 report, https://www.superannuation.asn.au/resources/retirement-standard, accessed 1 December 2020.
3. Advice fees may apply. Refer to the Financial Services Guide for more information.
4. Before you consolidate your super, you should check with your other super funds if there are any fees or tax implications, or loss of insurance or other benefits.