Experts have revealed the exact amount of retirement you need to have in your savings at what age to live a comfortable retirement.
They say a couple needs $ 640,000 in super-retirement savings, while singles need $ 545,000, assuming they run out of their retirement fund and receive a partial old-age pension.
Figures are based on a couple or single person who has no mortgage or rent to pay.
A comfortable life is defined as one that allows a healthy retiree to enjoy leisure activities, buy household items, private health insurance, a reasonable car, good clothes, electronic equipment and travel.
So how do you know if you’re on the right track?
Well, according to the top body in Australia’s retirement industry, an average 25-year-old worker only needs $ 17,000 on his super today to reach $ 545,000 at age 67.
A 35-year-old man needs $ 93,000, a 45-year-old man should be $ 195,000, a 55-year-old man should have $ 330,000, and a 65-year-old man, two years from retirement age, would need $ 503,000.
Camera Icon A couple needs $ 640,000 in super savings on retirement, while singles need $ 545,000. iStock Credit: supplied
The Australian Retirement Fund Association (ASFA) estimate estimates pre-tax earnings of just under $ 65,000 a year.
ASFA Deputy Chief Executive Officer Glen McCrea said the aim was to get so many people to achieve what ASFA calls a comfortable standard, but so far only one-fifth of working-age Australians were reaching that level.
“A comfortable standard means you can go to the pub and eat, you can have a cup of coffee, when you’re of retirement age you can buy a gift for your grandchildren, you can fix your car,” McCrea said. .
“To get there, you’re looking at a balance of about $ 640,000 for a couple or $ 545,000 for a single person.
“The reality right now is that 20% of people get there.”
The deficit could stem from a failure by some to contribute large sums to the super during their working lives, he said.
But with the increase in retirement guarantee payments that employers have to make to workers under the law, the gap would be narrowed, McCrea said.
Camera IconAussies users are advised to evaluate their super balance regularly to make sure they are on track. Credit: supplied
Since July 2021, the usual mandatory contributions made by employers to their employees have gone from 9.5% to 10% of their salary, affecting about eight million workers, mainly in the private sector.
This would increase to 10.5% on July 1 and reach 12% in 2025-26, in accordance with current legislation.
“We estimate that by 12% in a couple of years, 50% of the population (by the comfortable standard) will be there by 2050,” McCrea said.
“There is hope and the super is a long-term perspective, so there is really hope that people who get higher super balances will have more dignity in retirement as they get older.”
McCrea said that during the pandemic, many people withdrew from their super to meet financial challenges, but had not replenished their funds when they could.
And with the rising cost of living, people may think that now is not a good time to make extra payments to secure their nest egg.
Camera Icon Getting extra money in super when you can help increase your nest. Credit: News Regional Media
“Things are difficult right now, but when you have this extra paycheck or this little bonus or you’ve been working a few extra shifts, see if you can turn it back into super because every dollar certainly counts as you go. towards retirement “. He said.
“The best thing about retirement is that it is mandatory and you often don’t realize it and then, over the years, it gets worse and worse, and it gives you a good balance.
“Obviously, when things are difficult, like now, there may not be the capacity to contribute, because the cost of living is going through the roof.
“However, in five or ten years, we assume that the economy is better, inflation is under control, it could be a good time, where if you are a little behind, try to catch up.
“So keep in touch with your super, look at your balance, talk to your fund, and look for these opportunities to contribute when you can.
“Do you know this and try to understand, ‘I’m on my way’?
“If people contribute 12% for most of their lives, they should be able to reach a comfortable level.”