Ways Exist to Bridge the Super Gap
MANY workers make the mistake of overestimating how much theyCOll have in super by the time they retire, while also underestimating how much they need to enjoy a comfortable retirement. It can leave plenty of Australians facing a superannuation shortfall, and the best way to bridge the gap is by keeping track of your super savings long before retirement rolls around.
When it comes to working out how much income youCOll need in retirement, the ASFA Retirement Standard offers a useful benchmark. ItCOs based on the annual budget required to fund either a C[pounds sterling]comfortableC[yen] or C[pounds sterling]modestC[yen] standard of living in our post-work years.
The latest Standard shows that a couple hoping for a C[pounds sterling]comfortableC[yen] retirement would need an annual income of over $56,000 after tax. Those seeking a C[pounds sterling]modestC[yen] retirement lifestyle need to spend over $32,000 a year. Bear in mind, these numbers assume the couple owns their home, mortgage-free Co there is no allowance made for home loan repayments or rent.
By way of comparison, a couple relying on the age pension today could receive a maximum combined annual income of $27,898. ThatCOs well below the amount needed for ASFACOs C[pounds sterling]modestC[yen] lifestyle.
The next step is to work out how much youCOre likely to have in super by the time you retire. This can involve a bit of guesswork as the final balance will hinge on long-term investment returns. The governmentCOs MoneySmart website offers a useful online calculator to help you come up with a reasonable estimate. Just have your most recent super fund statement handy to fill in key details, and visit moneysmart. …