Will you have enough money in your superannuation to pay for the life you want in retirement? Many of us don’t know. According to The Association of Superannuation Funds of Australia, 50 per cent of people don’t know how much super they will need for retirement.
So if like millions of others you can’t answer that question, it’s time you take a step back and ask: Do you know what kind of lifestyle you want in retirement? Do you know how much you need to pay for that life? Do you know how much you have invested now?
For a couple, a yearly budget of $59,971 is recommended in retirement by ASFA for a comfortable standard of living; for a single person that is $43,665 for those around 65 years of age. Based on these figures, If you are retired for 20 years, that means a couple will need a total of around $1.2 million when they retire or $870,000 for a single person.
That may sound daunting, but using ANZ’s retirement calculator is a big help to getting your head around:
- how much you’ll want/need
- a projection of how much you'll have at retirement
- how you can impact your projected amount.
So while “ASFA projections show those reaching the comfortable standard will increase from about 20 to 40 per cent of Australians by 2040” according to ASFA chief Martin Fahy, that’s a long way off. For most of us to make sure we’ll be comfortable, we need to thoughtfully monitor our super savings and take action to keep them on track. That’s where our calculator comes in.
Using the calculator, estimate your retirement savings based on your contributions and your current balance, while making some general assumptions. Then play around to see how that figure can change by tweaking:
- your retirement age
- whether you want a ‘modest’ or ‘comfortable’ post-work standard of living
- what extra super contributions you make via salary sacrifice
- what level of risk you’ll accept in your investment.
Regarding your investment choice, in ANZ Smart Choice Super, members are usually entered into a lifestage fund according to their decade of birth. But you’re not locked into that. In the calculator you can nominate a higher risk level of investment to see the potential growth in your account. If you want to make the change for real, adjust your account by nominating to move from a ‘lifestage fund’ to ‘choose-your-own investments’ at any time.
Note: The calculator is not intended to provide personal financial advice and is not a recommendation to purchase or vary an interest in a financial product.
These examples explain further how to use the calculator to re-think the total super savings you want.
How risk affects your investment
Medium risk appetite
In this instance, we can see there’s a total gap of $48,000 for this person to reach a comfortable standard of living in retirement. However, they would only need to contribute another $16 a week to reach their goals.
Very high risk appetite
Here we can see ‘very high’ risk profile selected, and this person should meet their goals to be able to retire comfortably.
Login to your account today and have a play around to see where you currently stand, and what actions you can take to help reach your goals.
For those without access to their account online call us today on 13 12 87 and we can help.
All case studies are hypothetical and are not meant to illustrate the circumstances of any particular individual. Taxation law is complex and this information is our interpretation of the law. It has been prepared as a guide only and does not represent tax advice.
You should seek independent tax advice specific to your individual circumstances from a tax adviser or registered tax agent.
Superannuation is a long term investment and the rules and regulations governing it are subject to change. ANZ recommends that you keep informed of the changes to superannuation and any potential impact any changes may have.
The calculator is not intended to provide personal financial advice and is not a recommendation to purchase or vary an interest in a financial product. Before making any investment decisions, you should consider whether a product is appropriate for you and read the relevant Product Disclosure Statement.