June 2015 living standards
This quarter saw increases in the cost of fuel, medical and hospital expenses translate into an increase in the ASFA retirement benchmarks. For a modest lifestyle (better than a Government pension but fairly simple living), the annual guidelines are now $23,662 for a single or $34,051 for a couple. For a more comfortable lifestyle, the estimates are $42,861 for a single and $58,784 for a couple.
More significantly, following recent changes to the Age Pension means test, ASFA has increased substantially its estimates of super balances required at retirement. For a comfortable lifestyle, couples will need a balance of about $640,000, or $545,000 for a single. These estimates have increased by more than $100,000, and may warrant a serious review of your situation and accumulation strategy.
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 for a modest or comfortable retirement lifestyle (based on ASFA's definitions as explained above). The ASFA website includes a simple calculator to show how much super may be enough.
Your personal circumstances and goals also need to be considered in deciding how much super you will need in retirement.
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.