Bec Wilson answers: Will I have enough?

If you’re approaching retirement, there’s a good chance you’ve wondered whether you’ll have enough money to live the life you want. 

You might look at your super balance and wonder “is that enough?”. You hear someone saying you need a million dollars to retire and wonder if you’re behind. You compare yourself with your friends, or posts you see on social media and feel afraid of even exploring it. And the fear grows.

This isn’t unusual. Really!

But, what I want you to know is that you can’t work out whether you have enough until you sit down and explore what enough means to you.

The reality is, there is no single number that tells you whether you have enough. Your version of enough depends on the cost of the life you want to live, how long you might live, and what other sources of income might be available to you to support your retirement along the way.

So rather than worrying about whether your super balance is big enough, let’s work out what you actually need it to do, so you can start doing something about that fear. 

There are a few things to think about as you start to define what ‘enough’ means for you:

1. Start with the life you want to live.

Dream about what retirement might look like for you. Will you caravan around Australia, travel overseas every year? Will you live in an apartment in the city, a house in the country or a villa by the beach? And what do you want to do with your time?

2. Consider how long you might live.

The median life expectancy, for a 50-year-old today is 89 for a man, 90 for a woman¹, and you should plan for a couple to see one of you reach 95. That’s not a short life. And that should be part of your plan and vision.

3. Work out how much you spend on your cost of living each year.

Consider how your budget might change as you head into retirement. That annual number is different for everyone, and is a really important number when you’re planning your retirement because it sits underneath the ‘how much is enough’ calculation.

4. List all the epic experiences you want to have in your retirement.

Big trips like driving a caravan around Australia, or touring through Canada and Alaska, spending your 70th birthday on a multi-generational family holiday, celebrating your 50th wedding anniversary with a big party or simply having the money to take your grandchildren away for a week each summer. Let your imagination go wild, but also be realistic, because these are going to go into your budget too. Once you have a list, estimate what each one might cost and then put them in priority order, starting with the experiences that matter most to you. 

5. Think about the big one-off expenses you’ll need or want to fund.

This is the less exciting stuff that’s easy to forget. Replacing the car, renovating or maintaining your home, helping your kids with a wedding or home deposit, modifying your home as you get older. These expenses might not be part of your annual cost of living but the money still has to come from somewhere.

6. Think about where your retirement income might come from.

Understand how much money is in your super, and think about the other sources of income that might support you.  A lot of people continue to work for a while, many have savings and investments outside super. And 56%² of Australians access a part or full age pension. All of these should form part of your picture.

So where do you start?

Give these things some thought - then get practical. Use a retirement calculator to bring these pieces together and see what your retirement might actually look like.

And you might be surprised by how it all comes together. When you look at the calculator’s projections, don’t be afraid to play around with them. Explore what adding a little more to your super, working a little longer, changing your spending levels or adjusting some of your plans might do.

The aim is to understand where you really stand, and the levers you can pull to make a difference. That’s what turns this fear into choices you can make more actively.