How much super do you need to retire?
New figures from Super Consumers Australia show the impact of increases in the cost of living on how much Australians need to retire. In light of the findings of the Intergenerational Report, these updated targets are designed to give confidence to Australians to spend down their savings in retirement and avoid passing away with significant super balances unused.
Independent consumer advocate Super Consumers Australia has updated its home-owner retirement savings targets to reflect changes in the cost of living and the Age Pension.
“Our retirement targets provide home-owning Australians with a ‘rule of thumb’ for what is needed to maintain living standards in retirement. The new figures show the need for higher savings for most Australians, reflecting the cost of living pressure people are currently facing. Thankfully it is not all bad news, as Age Pension increases and positive super fund returns have been working to offset the impact of inflation,” says Xavier O’Halloran, Director of Super Consumers Australia.
“Most people will access the Age Pension at some point in retirement. When combined with earnings from super, over the long-term the retirement system is designed to provide significant protection against cost of living increases. These figures are designed to give people greater confidence to enjoy the income they’ll receive in retirement.”
“The savings targets are about 3 to 8% higher than last year. People with their super in a typical balanced fund would have seen their balances grow by about 9% over the same time period, helping to cover the cost of living increases. This means people might be closer than they think to their retirement savings goals.”
“Our targets are designed to get people more engaged with retirement planning, the next step is to get a more personalised picture of what you need to save and how to reach your goals. The following resources are there to help:
- MoneySmart,
- Financial Information Service,
- Independent financial advice.
The development and ongoing maintenance of our retirement targets is supported by a philanthropic grant from Ecstra Foundation. Ecstra is committed to building the financial wellbeing of Australians within a fair financial system.