How to calculate your needs in retirement

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How much money you will need in retirement is actually a very different question to how much money is enough. Which is just as well, as no one really seems to know the answer to the latter question – with amounts from $500,000 to $1.5 million and everything in between bandied about by ‘experts’ as being ‘enough’.

The important question you need to ask yourself and the calculation you need to undertake is ‘how much will you need to live in retirement’?

A good place to start is by measuring your expected expenditure against the retirement standard issued by the Association of Superannuation Funds of Australia (ASFA), which details how much is needed to have a modest or comfortable lifestyle in retirement. Creating a simple spreadsheet using the categories in the retirement standard will give you an indication of how much you need to cover costs on a regular basis.

In addition to the categories covered by the retirement standard, you should also add to your spreadsheet the liabilities, such as credit cards and mortgage and loan repayments you will carry into retirement that are not included in the retirement standard.

Next, you will need to consider any additional expenses you may incur, such as the purchase of a new car, specific travel plans or medical expenses over and above what you have detailed on your spreadsheet.

Once you have compiled the above information, you can then break down what you will need to spend on a weekly or fortnightly basis. This can then be factored into the income you can derive from your superannuation, investments and any Age Pension you will receive.

Australian Super has a handy calculator that, with the input of some basic information (nothing personal) will give you an indication of how much income you can derive from your superannuation and how it can be topped up by the Age Pension, to help you meet your income needs.

This article has been sponsored by AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788. The views expressed are those of YourLifeChoices and not necessarily the views of AustralianSuper. The article contains general information and you should consider if it is right for you.

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6 Comments

Total Comments: 6
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    I think the ASFA Retirement Standard detailed budget is helpful and worth looking at closely but I don’t understand the “0.00” under “Gifts” across all columns. Surely older people would enjoy giving their grandchildren/other family members/friends small presents for birthdays, Easter, Christmas, weddings, etc..especially if they are enjoying a comfortable retirement.

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    Good idea in principal BUT. We did this 12yrs ago and all was good, then GFC, interest rates on continual decline, utilities, rates etc. climbing through the roof, Centrelink deeming issues and now in 2017 we will have our $6000 part pension removed. What use was all that planning when the goal posts keep moving and the Govt call us bludgers and want our houses for pensions and aged care, they cannot wait for us to be dead and buried. How to get your own back – If you trust your kids, then give them everything and get them to support you. Then claim a full pension. You will still be streets behind the pollies who make the rules but a hell of a lot better off than being an honest saver trying to care for yourself.

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      Yes, Imagine. No incentive to be honest. The honest, responsible hard-working Aussies who planned for retirement according to Government advice have been thoroughly screwed over. It’s disgusting!

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    If you are over 70 With only Australian pension living in Australia and no other income well ….what can I say …. very hard to live a life with dignity and in peace.

    I will move out and live overseas I had no choice unless I sleep on my car and eat McDonalds every day or if I am lucky get a gov. house in a place surrounded by drugs and bad people or many very sick in the head people so what to do …. no choice just leave.

    I love my country my cities my kids and family and friends …. all good but I refuse to be a burden for anybody I love my independance and I do not want charity …. I am very happy and graceful that I receive a full pension in Australia and be able to live O/S country that is cheaper to subsist every day and eat fresh vegetables good beef, chicken etc.cheap rent ($150 x month small house) …. make new friends warm climate nice beach nice country sites Green green everywhere.

    So my Minimum pension rates for the rest of my life is sufficient to subsist very well anywhere except Australia My plans are to move out at the end of this year maybe Thailand or Bali ???? so stay near my kids and able to fly back every now and then for a visit

    My calculations and on site visits to ensure I make the correct decisions is telling me that December or Jan is the correct time to move out

    Wish you all of you over 65/70 with only pension as income a good luck in the future with all the gov. changes.

    Don’t Die be better and happy for the rest of years you have ….. Do not worry about anything just live happy ….I am and very very happy
    Anything I can help let me know and I will ….. except money he he he he

  4. Profile Photo
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    Certainly you can plan ahead and hope for the best. None of us know People living on pensions can only live on a month by budget/

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      Mate there are choices and I have taken one of them …..leave Australia for good … Things have been from bad to worse the last 10 years only politicians are winning here no us that work our life to pay taxes and develop properties and families ….. but no reward for us so I am taking the best choice now I have a property fully paid a car almost paid and all with my pension only but not in Australia.

      If I can be of any assistance just let me know I will be happy to assist ….. lots of English and Australian people retire here in the Land of Smiles (LOS) he he email me [email protected]


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