Before you retire, all that superannuation you’ve accumulated can look like a pretty impressive number. But bear in mind that the average Australian needs to live on their super for 15 years or more.1 That takes some careful planning, regardless of how much you start with.

When it comes time to start accessing your super, you’ll need to choose whether you withdraw it as a lump sum, an income stream or a combination of the two. Taking a lump sum can have significant tax implications and may affect your Centrelink entitlements, so it’s best to know the ins and outs upfront.

How much super do you need to be comfortable?

The answer depends on a few factors like how you’re planning to spend your retirement and how long your money needs to last. But to give you an idea, the Association of Super Funds of Australia (ASFA) puts together a Retirement Standard which estimates how much it costs for both a modest and comfortable retirement lifestyle. It takes into account the usual expenses for a retiree who owns their own home.

According to the ASFA, a comfortable lifestyle for a single person costs $43,184 a year, or $59,236 for a couple. Figures for a modest lifestyle are $23,797 and $34,226 respectively.2

The government’s Age Pension is slightly lower than the modest lifestyle figures, which is a good reminder of why we might want to stretch our super as far as possible in retirement

There are a few other things to think about when you’re working out how much super you’ll need. These are outlined on our How Much Super Do You Need? page. Or try our handy retirement income calculator to see how long your super could support your comfortably in retirement.

The way you spend money at the beginning of your retirement is likely to be very different from how you spend it later on. Initially, you might decide to use more of your money travelling or on sporting pursuits.

But in late-retirement you’re likely to need to spend more on medical and health-related expenses. So it’s important to keep some of your super tucked away, just in case.

Fortunately, there are a number of ways you can make your super last longer. Here’s just a few:

  • take full advantage of government benefits
  • make smart investment choices – a financial adviser from QInvest can help you find your best options
  • minimise your tax - check out our tax and super information to get in the know
  • consider working in retirement to make your super go the extra distance
  • if you’re still working, contribute more to your super by salary sacrificing using your pre-tax income. Just note that if you go over the cap on the amount you can contribute using salary sacrifice, there will be taxation consequences. 

These days people are likely to live at least 20 years into retirement. When you consider that a long-term investment is usually defined as being for ten years, you’ve got plenty of scope to include a mix of high and low investments in your Accumulation or Income account.

For further information you can contact us here at QSuper and we’ll be happy to answer your questions and review your superannuation options.

1. Source: Australian Bureau of Statistics – Retirement and Retirement Intentions, Australia, July 2012 to June 2013.

2. Source: ASFA Retirement Standard, December quarter 2015.