December 2014 living standards
For a modest lifestyle (better than a Government pension but fairly simple living), the annual guidelines are now $23,469 for a single or $33,766 for a couple. For a more comfortable lifestyle, the estimates are $42,604 for a single and $58,364 for a couple.
This equates to a combined balance of about $510,000 in super for a comfortable lifestyle as a couple or $430,000 for a single.
Compared to the September 2014 quarter, these annual figures have changed only $20-$40. The stable bottom line of these budgets serves to conceal larger variations. This quarter’s 8% drop in the price of petrol effectively hides price rises in several other categories in any ‘at a glance’ comparisons.
Seriously contemplating how your life might differ to the assumptions behind the annual retirement standard guidelines will help you set savings goals. For example, However, as changes to your requirements (such as a shift from leisure to health expenses) are as unpredictable as the increased expenses, saving as much super as possible before you retire can’t be overlooked as a key to protecting your retirement lifestyle.
The ASFA Retirement Standard provides an invaluable starting point for looking at your requirements in the future and making plans on that basis now. It provides some insight into the proportions of retirement budgets typically spent in retirement across basic categories such as food, health and transport.
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.
What does this mean for you?
It may mean you need more super than you thought – consolidating other accounts into one, making personal contributions and salary sacrificing are ways to increase super. This could be a good reason to contact our Member Advice Consultants for some personal advice, too.
* You can use the Australian Bureau of Statistics life tables for an idea of your life expectancy.