We live in challenging times, perhaps now more than ever amid the COVID-19 coronavirus crisis. In light of the current economic upheaval, if retirement was on your near-term horizon you might now be questioning whether that goal is still realistic.
If this is something that’s concerning you, the information below should help you work out if your retirement plans are still on track.
How much is enough for retirement?
Figuring out how much is enough for retirement depends on many factors, such as your current salary, super balance and other assets, lifestyle, plans for the future, age you plan to retire and life expectancy. Our retirement needs calculator can help.
The Association of Superannuation Funds of Australia (ASFA) estimates that Australians aged around 65 who own their own home and are in relatively good health will need the following amount of money each week and year in retirement1:
A modest lifestyle is considered better than living on the age pension, while a comfortable lifestyle means someone can afford a good standard of living2. For Australians on above-average incomes, another rule of thumb is to assume you’ll require around two-thirds of your pre-retirement income3.
How much do you have?
Now you have a target figure in mind, investigate how much money you have saved towards that goal. This could be in the form of your super or assets such as equity in your home, shares or investment properties. When considering your assets, dividing them into those you own and those you still owe money on can give you a more complete picture of your financial situation.
If you’re an AMP client you can log into My AMP to check your super balance. You can also find out how your super is currently invested and research the other investment options available.
Another possible source of income in retirement is the government age pension. Learn more about age pension eligibility to see if you might be eligible for a full or part age pension to help fund your retirement.
Finally, once you know how much you might have for your retirement you can use our retirement simulator to work out how long it may last.
What to do if you won’t have enough to retire
If you’re facing a shortfall in retirement, you have a few options. You could consider boosting your super through additional contributions, delaying your retirement, adjusting your retirement lifestyle expectations, or selling other assets.
Simply by having an idea of your current and projected retirement savings, you can plan to improve your situation and the earlier you start, the easier it may be for you to reach your retirement goals.
Contact AMP on 131 267 to see how we can help or visit our COVID-19 hub for more information on how to get your retirement plans back on track.
1 Association of Superannuation Funds of Australia (ASFA) Retirement Standard December 2019.
2 Association of Superannuation Funds of Australia (ASFA) Retirement Standard.
3 ASIC Moneysmart, How much super is enough?
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