Superannuation
In order to maintain a comfortable lifestyle in retirement you need to be pro-active now and ensure your super contributions are sufficient to meet your expectations. You also need to ensure your choice of super fund is performing to maximise return.
How much super is enough?
Working out how much money you will need in retirement depends on your personal situation. Not only does the amount of money you need depend on your lifestyle choices, but you may have some other income options in retirement (such as part time work or payments from other investments) which will supplement your super. But you need to think about how much you'll need early enough to do something about it.
The Association of Superannuation Funds of Australia believes single person needs an annual income of $39,302* and a couple needs $53,729* to live comfortably in retirement. To achieve this, depending on when you intend to retire, you would need to have in your super fund:
^ Source: Colonial First State. Assumptions: earning 7% pa after fees and taxes with inflation at 2.5% and paid via an indexed income stream. A change to any of the assumptions and variables can produce significantly different results. * Source: Association of Superannuation Funds of Australia Westpac ASFA Retirement Living Standard, 'How much do you need to spend to have a comfortable standard of living in retirement' March 2007.
Now you may be thinking you can rely on the Government Aged Pension, but it's only about $22,802 (effective 1 July 2007) per year in total for a couple. So the chances are you'll need more money to fund the lifestyle you want. To get an idea of how much super you will need, try out the how much super is enough? calculator.
How can I get more from my super?. This diagram shows a few ways you can increase your super:
