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 2015 living standards
The overall benchmarked costs of retirement for older retirees have increased over the June quarter, following increases in the cost of fuel, medical and hospital expenses.
For a modest lifestyle (better than a Government pension but fairly simple living), the annual guidelines for older retirees are now $23,026 for a single or $34,214 for a couple. For a more comfortable lifestyle, the estimates for older retirees are now $38,369 for a single and $53,825 for a couple.
The June update also responds to recent changes to the Age Pension means test, leading to substantially increased estimates for the super balances required at retirement age. These estimates have increased by more than $100,000, and demonstrate the changes to pension means testing scheduled for 2017 may warrant a review of your situation.
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.