Determining whether you have enough superannuation for retirement is a complex and highly individual question. Much like planning a weekend getaway, everyone’s retirement needs and aspirations are different. While it’s challenging to provide a one-size-fits-all answer, these tips will help you assess your superannuation needs.

ASFA Retirement Standard

The Association of Superannuation Funds of Australia (ASFA) provides a useful starting point with their “Retirement Standard.” As of March 2024, ASFA suggests the following combined amounts for couples retiring at age 67:

• Comfortable Retirement: $690,000, providing an income of $72,663 per year.
• Modest Retirement: $100,000, providing an income of $47,387 per year.

These figures assume you will draw down all your super, receive a part Age Pension, own your home outright, and are in good health. Your personal needs may differ significantly from these benchmarks.

Tailoring Your Estimate with Online Tools

For a more personalised estimate, use online tools like the MoneySmart Superannuation Calculator, which provides projections based on your age, desired retirement age, and expected fund performance. The MoneySmart Budget Planner can help you understand your current spending habits, making it easier to project future needs.

Many super funds also offer detailed calculators and forecasting tools with additional features. Since July 2022, super funds have been encouraged to provide more assistance in formulating a retirement income strategy, resulting in new free retirement calculators and forecasting tools being developed regularly. However, keep in mind that these tools rely on assumptions that may not perfectly match your circumstances.

Age Pension: A Safety Net, Not a Solution

Many people assume they can rely on the Age Pension if their superannuation falls short. While it serves as a safety net, the Age Pension may not provide the comfortable lifestyle you desire. As of 1 July 2024, the Age Pension for a couple is $43,752 per year.

Seeking Professional Advice

For the most accurate assessment of your superannuation needs, seeking professional advice is the best approach. An adviser can consider factors such as your health, life expectancy, inflation, investment returns, wages growth, taxation, fees, and regular contributions. Professional advisers have access to sophisticated tools and can provide customised forecasts based on your unique situation.

Conclusion

Determining if you have enough super requires careful consideration of your personal circumstances and future goals. While general guidelines and online tools provide a starting point, seeking professional advice ensures you’re on track for a comfortable retirement. Contact our office for expert assistance in assessing your superannuation needs and planning for a secure financial future.