Income in Retirement – how much is enough?

The ASFA Retirement Standard is released every quarter and benchmarks the living costs for Australians seeking either a modest or a comfortable retirement lifestyle.

ASFA describes a modest lifestyle as being quite basic without much money for home maintenance and discretionary spending. There is no allowance for home improvements however retirees living a modest lifestyle can still afford to run a cheap car.

As of June 2021, the Retirement Standard reveals a modest lifestyle will cost:

Status ASFA Retirement Standard Age Pension – full rate
Single $28,514 pa $24,770 per annum
Couple $41,170 pa $37,341 per annum

Generally this modest lifestyle can be supported by the full rate of age pension, plus a small allocation from your nest egg.

On the other hand, a comfortable lifestyle will cost more, but will deliver a better quality of life with money available for some travel (once restrictions are lifted!), dining out, better quality clothes, entertainment, home improvements, and more.

A comfortable lifestyle will cost:

Status ASFA Retirement Standard Age Pension – full rate
Single $44,818 pa $24,770 per annum
Couple $63,352 pa $37,341 per annum

For people aspiring to a comfortable retirement lifestyle, they are going to need more savings, generally held in super, to provide the additional income required. ASFA suggests that people wishing to aspire to a comfortable retirement lifestyle will need to have retirement savings in the vicinity of $640,000 (couple) or $545,000 (single). It's also important to note that if your assets are of a level that sustains the comfortable standard its unlikely that the full age pension will be applicable.

Both budgets assume that the retirees own their own home outright and are relatively healthy.

How can an Adviser help In Retirement

Help you articulate what your preferred retirement lifestyle look like?

How much money do you need to support that lifestyle?

Where will that money come from – super, savings, inheritance, age pension, part-time or seasonal work?

How long does my money need to last?

Last Updated | 01/09/2021

The content of this document is of a general nature only, and does not consider your personal objectives, financial situation and/or needs. Accordingly, the information should not be used, relied upon, or treated as a substitute for specific financial advice. While all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither Centrepoint Alliance Limited nor its employees or agents shall be liable on any grounds whatsoever with respect to decisions or actions taken as a result of you acting upon such information.

Worried about if you will have enough in retirement?

Posted in Financial planning, Super.