How much income do you need to live in retirement? The individual income needs of retirees will differ depending on their circumstances.
However, there are common elements across most of the community. The Association of Superannuation Funds of Australia (ASFA) have been benchmarking the annual budget needed by retirees for the past 10 years and its latest Retirement Standard, for the December 2014 quarter, provides a comprehensive picture of how much is needed to support a retirement lifestyle.
The figures below make for interesting reading:
|Modest lifestyle – single||Modest lifestyle – couple||Comfortable lifestyle – single||Comfortable lifestyle - couple|
|Housing – Ongoing only||$69.47||$66.68||$80.52||$93.33|
|Household goods & services||$26.70||$36.21||$75.12||$88.00|
|Total per week||$450.09||$647.57||$817.07||$1,119.32|
|Total per year||$23,469||$33,766||$42,604||$58,364|
Source- ASFA Retirement Standard- December Quarter 2014
ASFA defines a modest lifestyle as being only able to afford fairly basic activities.
A comfortable lifestyle enables a retiree to be involved in a broad range of leisure and recreational activities and have a good standard of living through the purchase of such things as household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel.
When you consider that the maximum government Age Pension (from 20 March 2015) is $860.20 per fortnight for singles ($22,365 p.a.) and $648.40 each per fortnight for couples ($33,716.80 p.a. combined), the Age Pension on its own only barely provides for a modest lifestyle.
Therefore, to enjoy a comfortable lifestyle, a retiree needs to generate regular income from sources other than the Age Pension, and this will most commonly come from superannuation. And with retirement for many being for a period of 30 years or more, these superannuation assets need to last. It is therefore essential that individuals don’t delay when planning for their retirement and seek advice on how best to invest their superannuation assets to give them the best chance of being able to meet their retirement income needs.