Older retirees: Will you have enough super for a longer retirement?
One of the biggest questions about super — will I have enough super in retirement? — has been changing.
Australians’ increased life expectancies, along with the numbers living into their nineties, have meant that questions about how spending requirements change when people age are becoming more prominent at both a policy level and in personal financial planning.
The ASFA Retirement Standard for Older Retirees shows that as people age, their spending requirements change as they are often unable to engage in the same types of activities, and often require different types of care and support, which have different cost implications.
June 2017 living standards
The overall benchmarked costs of retirement for older retirees increased by around 0.5% this quarter at both the modest and comfortable retirement standards. Relief came from seasonal fruit and domestic holidays, yet increases to the costs of power, health care and rates added to the demands on retirement budgets.
Over the year to the June quarter, the increase was 1.5% for comfortable and 2.1% for modest, compared to the general Consumer Price Index (CPI) increase of 1.9%.
For a modest lifestyle (better than a Government pension but fairly simple living), the annual guidelines are now $23,878 for a single or $35,369 for a couple. For a more comfortable lifestyle, the estimates are $39,443 for a single and $55,382 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.
What does this mean for you?
It may mean you need more super than you thought – this could be a good reason to contact our Member Advice Consultants for personalised advice about how to maximise your savings.
*You can use the Australian Bureau of Statistics life tables for an idea of your life expectancy.