The age old question "how much savings do you need to be able to retire confidently?", requires a very much individual answer. The more the better seems like an obvious answer to such a question. However, those lucky enough to reach the brink of these golden years will likely feel much better with some reassurance that what has been saved is enough to indulge in a comfortable retirement.
Several factors further complicate the answer. Things such as how long you will live or what medical issues/necessities could arise in later life, all which will be unknown to you at the present.
Each quarter a "retirement standard" is released, as a benchmark. In doing this, Australians can determine the annual budget needed to fund either a "modest" or "comfortable" standard of living in their retirement.
Each updated figure reflects inflations of the quarter and provides an objective outline of the budgets needed to support the chosen lifestyle, for both singles and couples.
Figures released up to 30 June 2018 details that the super accumulation balances needed for an overall "comfortable" retirement totals $545,000 for singles and $640,000 for couples. Therefore, this equals $42,953 and $60,604 respectively, in annual pension payout terms. Outlined in the table below are details of what these amounts mean for spending capacity.
To compare, the government base rate for Age Pension is $21,222 for singles and $31,995 for a couple. The Age Pension was created in order to provide a 'safety net' for those who don't have enough financial resources or superannuation to provide an adequate income for retirement. Therefore, it works in conjunction with superannuation. In turn, most people - particularly women - will still be eligible for either full or part Age Pension, which is then complemented by any superannuation benefits they receive.
However, ASFA makes note that as people age, their spending needs and requirements also change. Estimates show that the net impact of various factors at play signify that when individuals reach age 85 annual budgets are likely to reduce by close to $1,000 a year for “modest” lifestyles, and $5,000 a year for “comfortable” lifestyles.
In order to understand what each lifestyle entails, the following table has been provided:
** figures and table were provided by Super Guru