Superannuation: how can you make yours last longer?

How can you make the most of super and your retirement income?

Superannuation: how can you make yours last longer?

On the face of it, asking how long your super should last is pretty much like asking how long is a piece of string. While you may not be able to reach a definitive answer, you should be able to at least gauge when you can afford to start your retirement, how you can make your money last longer and how long you can expect to live in retirement.

How long will you live in retirement?
In 2012–14, the average life expectancy, according to the Australian Bureau of Statistics (ABS) for a male was 80.3 years, while women might expect to live to 84.4 years. The older you get, the longer you’re expected to live – it’s called the survival bonus.

Taking into consideration these averages, retiring at 65 may no longer be possible for many and indeed, the current eligibility age for the Age Pension is gradually rising from 65 to reach 67 by 2023.

What kind of lifestyle do you want to live in retirement?
Realistically, the kind of lifestyle you actually live in retirement will more than likely be determined by the amount of income you can derive from your savings. While it’s natural to assume that living in retirement is less expensive than when you are working, the associated costs can come as quite a shock to some.

The Association of Superannuation Funds in Australia (ASFA) issues a quarterly Retirement Standard that indicates how much it costs to live a modest and comfortable lifestyle, for singles and couples. In the most recent (December 2016) ASFA Retirement Standard, a single retiree would need $24,108 per annum to live a modest lifestyle and $43,538 for a comfortable lifestyle. This amount however should be treated with caution as it does not take into consideration rent or mortgage costs. 

How can you fund your years in retirement?
Given that the amount quoted by ASFA to live a modest lifestyle is $1013 per annum more than the amount of a full Age Pension – $23,095 including supplements – many retirees are likely to have to rely on an additional form of income to meet living costs.

One way to do this is by continuing to work either part-time or on a casual basis. This can help boost your income not only in the obvious way, but also by applying the Work Bonus. This allows for the exemption from assessment of the first $250 of fortnightly employment income. so you may also be able to qualify for at least a part Age Pension.

Another way is to commence an income stream from your superannuation. By calculating the amount you can withdraw in a pension from your superannuation, you may also be able to continue receiving an Age Pension.

How you live and fund your retirement is, of course, up to you. Seeking advice and maximising your income will put you in the best position to see out your retirement years with the income to meet your lifestyle needs.

For information on how to maximise your income in retirement, visit Australiansuper.com

This article has been sponsored by AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.  The views expressed are those of YourLifeChoices and not AustralianSuper. For more information about AustralianSuper, please visit australiansuper.com

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    COMMENTS

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    pedro the swift
    5th Apr 2017
    10:18am
    Thats easy. Join A mainstream political party.Get a seat in parliament. Retire on a huge pension and all the perks. No worries.
    The pom
    5th Apr 2017
    11:00am
    And you can do that whilst still relatively young so you can then get a good job and live like a king with job income and parliament boondoggle money
    older&wiser
    5th Apr 2017
    2:43pm
    Soon that will be the only way to retire with any kind of sustainable super funds

    5th Apr 2017
    11:23am
    I can tell anyone who is interested what we did and I stress that it is not for everyone. We went to a financial adviser who got us to fill out a budget for the coming year. He discussed it with us and sent us away after arranging an appointment for 12 months later. The budget which we prepared was discussed at length, minor adjustments made and the financial adviser then formulated a plan to enable us to retire with an acceptable amount of super for our needs.
    Sundays
    5th Apr 2017
    2:54pm
    Having a budget is the only way to live within your means. Ours is on spreadsheet using Excel which I update monthly but there are other ways to monitor. My daughter found this boring but wanted tips. I suggested that they save 10% as soon as they got paid by having it go to a different account, review things like insurances, electricity providers etc to get the best deal, shop fortnightly using their debit card and take out a fixed amount each for spending. Apparently, it has made a big difference to their finances.
    Hasbeen
    5th Apr 2017
    2:35pm
    When my mother died at 99 I found she had been saving $100 a week, $5000 a year from her pension, & banking it for her grand kids.

    She insisted on paying for everything, most of her food, & the electricity bill for the granny flat she lived in, even buying a different car to her old one, suitable for loading her wheel chair, after she needed it.

    The only expense she did not have was housing. If she had been paying rent, or rates & maintenance of a home I reckon she would have just made it, with a very simple life style, on the single pension.
    KB
    21st Apr 2017
    12:58pm
    As you become older you do not really need a whole lot of things You can still enjoy life on a budget. If you like reading then join the library. Books are free to borrow and you can read the papers in the library, As for exercise no need for the gym go walking.Use public transport instead of driving a car. Grow your fruit vegetables and herbs.If you have too much then share or sell them.


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