Will you have enough super in retirement?

It is one of the biggest questions about super - how much is enough to live on after retirement?

Of course, the exact answer is different for everyone as it depends on how long you are in retirement, what financial commitments you have, the lifestyle you want, and what non-super assets you have. However, the superannuation industry association, ASFA, has devised a retirement standard which benchmarks two levels of annual budget Australians need once they stop working.

Early in 2011, this retirement standard was revised to acknowledge higher living standards and costs; that is, the calculations now include more items as ordinary expenses such as internet access, health insurance, quality clothing, club membership and owning a car. The figures were also adjusted for inflation and higher costs for utilities, transportation and communications.

Each quarter, ASFA releases new figures to allow for moving living costs. Between the September and December 2011 quarters, retirees' food costs decreased by 1.5% largely related to a 13.4% fall in fruit prices and 5%in vegetable prices.

Transport costs remain steady, but electricity prices increased (more in some states than others) along with communications costs. Health services' price decreased with lower pharmaceutical prices, although increased over the year as a whole. Leisure goods and services increased in price, including a 7.3 increase in domestic holidays although overseas holiday prices fell by 1.9%

Overall, living costs actually decreased the amount of annual income required for a comfortable lifestyle by 0.1% for a couple since the September quarter – similar to the 'no change' Consumer price index (CPI).

For a modest lifestyle (better than a Government pension but fairly simple living), the annual guidelines are $21,930 for a single or $31,675 for a couple. For a more comfortable lifestyle, the estimates are $40,407 for a single and $55,249 for a couple.

So how much do you need? If you take the relevant annual figure and multiply it by the number of years* you expect to be in retirement, you will get a rough idea of how much super you need to have when you retire.

The full break down of these estimates is available on the ASFA website, along with a simple calculator to show how much you need according to your state and marital status.

What does this mean for you?

* You can use the life tables for an idea of your life expectancy.