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How much super do I need?

“How much super do I need?” is one of the most common questions we get at First Super. Yet, there’s no set answer, it’s different for everyone.

How much super you need depends on many factors, including what your retirement lifestyle will look like and how long you’ll be retired for.

To work out how much super you will need, we need to dig a little deeper…

How long will you be retired for?

Australians are living longer; in fact, we’re ranked 3rd worldwide for longest living.

Life expectancy is around 81 for men and 85 for females so your retirement may last 15, 20, 30 years, or even more.

This is why it’s important your super savings are invested wisely in retirement so you can keep earning investment returns even while you are retired.

It will help your money to last longer.

What does your retirement lifestyle look like?

Generally, in retirement our day-to-day living expenses are lower, and some income and investment earnings can be tax-free if you use a First Super Retirement Income account.

However other expenses such as health care or travel may increase.

It’s important to think about how you will spend your retirement and what that lifestyle will cost.

Retirement guidelines

The Association of Superannuation Funds of Australia (ASFA) provides guidelines1 for people planning their retirement. The following table outlines two different lifestyles in retirement, and what they may cost.

Comfortable lifestyle Modest lifestyle
A comfortable lifestyle allows you to:

• afford daily living expenses,
• attend regular exercise classes and leisure activities
• have frequent social outings
• travel once a year within Australia or every seven years internationally

A modest lifestyle allows you to:

• pay for the basic living expenses
• afford basic health insurance
• have occasional social and leisure activities with friends and family
• sometimes attend exercise classes

Comfortable lifestyle (p.a.) Modest lifestyle (p.a.)
Couple

$72,663

Single

$51,630

Couple

$47,387

Single

$32,915

How much super will you need?

So now you’ve worked out what lifestyle you’re looking for in retirement, how much super will you need to pay for this? ASFA provide some guidelines1 on this.

Comfortable lifestyle

Requires a lump sum of

Modest lifestyle

Requires a lump sum of

Couple

$690,000

Single

$595,000

Couple

$100,000

Single

$100,000

These amounts for a comfortable lifestyle assume that you use a combination of super savings, cash, shares and other investments, together with a part Age Pension throughout your retirement These lower amounts show that a modest lifestyle would be mainly funded by the Age Pension and retirement income supplements, together with other savings. The Age Pension is considered enough to cover the requirements of a basic modest lifestyle.

Find out how you’re tracking

1. Check your super balance

Find out how much super you have anytime through firstonline.

Log into your account

2. Speak with a First Super financial planner

Find out how you’re super is tracking with a Retirement Health Check.

It’s a quick health check for your super with a First Super financial planner. It’s a benefit of being a First Super member and there’s no additional cost to you.

We can even include your partner in the Retirement Health Check, regardless of which super fund they belong to.

Book a Retirement Health check

3. Retirement planner calculator

If you prefer more of a DIY approach, check out the Money Smart Retirement planner.

It only takes two minutes to add in simple details like your income, retirement age and super balance. It will show you how long your super will last and how much income the Age Pension can give you too.

It’s super easy to use and only takes a few minutes of your time to see how you’re tracking for retirement.

MoneySmart retirement planner

How to receive a regular income in retirement

Making sure your super savings last throughout your retirement can be tricky. Using a retirement income stream such as First Super’s Transition To Retirement (TTR) account and Retirement Income account, can help you achieve this.

Before you retire

A First Super TTR account can be used in the lead up to your retirement through a ‘transition to retirement’ strategy.

This means you can receive a regular income from your TTR account while contributing your salary to super. It offers some pretty good tax advantages and can even allow you to reduce your working hours while maintaining the same income.

In retirement

Converting your super to a First Super Retirement Income account in retirement allows you to receive regular, flexible income payments.

Your super savings are invested in your chosen investment options, so they continue to earn investment returns, while you withdraw an income.

WE’RE HERE TO HELP. SO LET’S TALK.

If you have any questions, please call our Member Services Team on 1300 360 988, or email us.

The information shown on this website is general in nature and has been prepared without taking into account your objectives, financial situation or needs. Before investing in any product you should read the relevant Product Disclosure Statement (PDS) and consider the appropriateness of the product for your objectives, financial situation or needs.

1ASFA Comfortable and Modest figures as at March 2024 for people aged 65-84.

2First Super financial planners are authorised representatives of Industry Fund Services Limited (ABN 54 007 016 195, AFSL 232514).