How much is ‘enough’—and what constitutes ‘retirement’—are somewhat subjective concepts, but here’s some food for thought.
The Association of Superannuation Funds of Australia (ASFA) divides ‘enough’ into two broad lifestyle categories for the average Australian—‘modest’ and ‘comfortable’.
Owning a home and your relationship status can also affect how much is enough. As a lump sum figure, ASFA says that a single homeowner will need $545,000 to maintain a ‘comfortable’ retirement lifestyle ($640,000 for a home-owning couple).
The financial side of retirement is only one part of creating a meaningful life outside of the workforce. In fact, part-time work, volunteering, or other forms of unpaid work (like caring for family) can be just as important for retirees.
Dr Sarah Cotton, Organisational Psychologist and facilitator of SuperFriend’s Mentally Healthy Retirement Program, says it’s essential to manage the emotional side of retirement.
“Everyone tends to focus on their retirement portfolio, but we find the ‘psychological portfolio’ often gets left behind.”
To hear more from Sarah, head to our webcasts page and sign up to watch our ‘Preparing for a mentally healthy retirement’ webcast. Have you ever come across the term ‘longevity risk’? It’s worth noting this one as it’s the risk that you could outlive your retirement savings’ capacity to support your anticipated or desired lifestyle. (The Age Pension is a backstop against this—compare it with ASFA's ‘modest’ lifestyle of $27,386 for a single and $39,353 for a couple.)
Budgeting, managing investments, and setting achievable goals and objectives can help give you a meaningful picture of retirement and counter longevity risk. Resources like our budget planner or retirement adequacy calculator are good places to start—they’re on our Calculators and tools page.
ASIC’s website also has a number of useful, similar tools. You can also attend one of our educational seminars, or catch up on our webcasts any time.
And don’t forget you have access to UniSuper Advice for more personalised financial advice. Call us on 1800 823 842 for more information.
Being financially and emotionally prepared for retirement can be challenging. But it’s a very important part of developing—and living—a meaningful post-work life.
1. ASFA Retirement Standard