The eye-watering amount you'll need to save for retirement if you want a comfortable lifestyle – according to finance experts
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We all dream of a comfortable retirement. We envision a life of leisure, with ample time to travel, spend time with family and friends, and pursue our hobbies. But for most of us, that dream is just that – a dream.
The reality is that most of us will have to work well into our 60s, 70s, or even 80s to have any hope of a comfortable retirement. And even then, it may not be enough. If you’ve already retired, you’ll know what we mean.
In fact, new research suggests our dream retirement is going to take a lot of money!
According to the survey, the average Australian will need to save around $75,000 to $100,000 per year to retire comfortably.
If you want to live a luxurious retirement full of travel, you'll need even more.
A comfortable retirement may be difficult to achieve for many Aussies. Credit: Jub Job / Getty Images/iStockphoto.
As inflation and cost of living continue to rise, both issues have highlighted significant issues the average Australian will face in the future.
A survey by financial planner Merit Planning collected hundreds of responses from retirees on their experiences, which revealed just how substantial their nest egg will need to be for the golden years ahead.
Only 6 per cent of respondents felt the age pension was sufficient to retire.
Additionally, 42 per cent of respondents indicated between $75,000 and $100,000 was needed, while approximately 20 per cent stated the average individual requires over $100,000 annually.
Financial planner Darren Howard said the average Sydney couple would need to earn about $85,000 per year combined to retire comfortably.
‘The full age pension provides approximately $25,000 for a single pensioner and $37,500 for a couple, so they will get this income if they retired with no money,’ Mr Howard said.
According to a survey of retirees conducted by Merit Planning, 42% of those polled thought the average Australian would need to earn between $75,001 and $100,000 annually to live well in retirement. Credit: Merit Planning.
However, only 33 per cent of respondents said the Association of Superannuation Funds of Australia's (ASFA) comfortable retirement standard sitting around $65,000 a year was enough.
The finance expert also noted that you would need a lump amount returning 3% interest of around $835,000 or 5% interest of roughly $500,000 for couples, or $1.25 million at 3% and $750,000 at 5%, respectively, in order to obtain the income you receive from the full age pension.
According to Mr Howard, many retirees still have the intention of investing in assets that will generate enough stream of income to support their standard of living while leaving other assets unchanged.
So, what can you do to make sure you're on track for a comfortable retirement?
The owner of CBM Mortgages, Craig McDonald, advised those who are seeking to retire comfortably must be aware of the true cost of retirement and the required amount of savings.
You should also consult a financial counsellor to acquire professional guidance on how to utilise your super as effectively as possible to meet your retirement goals.
For those of us who are nearing retirement age or already dipping our toes into the golden years, it’s important to have a plan in place. We need to make sure we have enough saved up to cover our costs, whether that means working a few extra years or downsizing our lifestyle. And, we need to be prepared for the possibility that we may not be able to rely on the age pension.
It’s time to start getting real about retirement. For many of us, it may no longer be a time of rest and relaxation. Instead, it can be a time of worry and insecurity. But, with careful planning, we can make sure that we’re prepared for whatever the future may hold.
The reality is that most of us will have to work well into our 60s, 70s, or even 80s to have any hope of a comfortable retirement. And even then, it may not be enough. If you’ve already retired, you’ll know what we mean.
In fact, new research suggests our dream retirement is going to take a lot of money!
According to the survey, the average Australian will need to save around $75,000 to $100,000 per year to retire comfortably.
If you want to live a luxurious retirement full of travel, you'll need even more.
A comfortable retirement may be difficult to achieve for many Aussies. Credit: Jub Job / Getty Images/iStockphoto.
As inflation and cost of living continue to rise, both issues have highlighted significant issues the average Australian will face in the future.
A survey by financial planner Merit Planning collected hundreds of responses from retirees on their experiences, which revealed just how substantial their nest egg will need to be for the golden years ahead.
Only 6 per cent of respondents felt the age pension was sufficient to retire.
Additionally, 42 per cent of respondents indicated between $75,000 and $100,000 was needed, while approximately 20 per cent stated the average individual requires over $100,000 annually.
Financial planner Darren Howard said the average Sydney couple would need to earn about $85,000 per year combined to retire comfortably.
‘The full age pension provides approximately $25,000 for a single pensioner and $37,500 for a couple, so they will get this income if they retired with no money,’ Mr Howard said.
According to a survey of retirees conducted by Merit Planning, 42% of those polled thought the average Australian would need to earn between $75,001 and $100,000 annually to live well in retirement. Credit: Merit Planning.
However, only 33 per cent of respondents said the Association of Superannuation Funds of Australia's (ASFA) comfortable retirement standard sitting around $65,000 a year was enough.
The finance expert also noted that you would need a lump amount returning 3% interest of around $835,000 or 5% interest of roughly $500,000 for couples, or $1.25 million at 3% and $750,000 at 5%, respectively, in order to obtain the income you receive from the full age pension.
According to Mr Howard, many retirees still have the intention of investing in assets that will generate enough stream of income to support their standard of living while leaving other assets unchanged.
So, what can you do to make sure you're on track for a comfortable retirement?
The owner of CBM Mortgages, Craig McDonald, advised those who are seeking to retire comfortably must be aware of the true cost of retirement and the required amount of savings.
You should also consult a financial counsellor to acquire professional guidance on how to utilise your super as effectively as possible to meet your retirement goals.
For those of us who are nearing retirement age or already dipping our toes into the golden years, it’s important to have a plan in place. We need to make sure we have enough saved up to cover our costs, whether that means working a few extra years or downsizing our lifestyle. And, we need to be prepared for the possibility that we may not be able to rely on the age pension.
It’s time to start getting real about retirement. For many of us, it may no longer be a time of rest and relaxation. Instead, it can be a time of worry and insecurity. But, with careful planning, we can make sure that we’re prepared for whatever the future may hold.
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