Retirement Planning
Ideally, retirement planning should be commenced early in life with regular reviews to cater for:
- Changed circumstances,-marriage, children, inheritances, employment etc.
- Revised likely retirement living costs.
- The need to address what superannuation and non superannuation monies are likely to produce at retirement and any potential shortfall in retirement needs
How much will I need in Retirement?
The Association of Superannuation Funds of Aust (Refer to www.superannuation.asn.au) indicates the following income levels in retirement
|
Single female |
Couples |
Modest Living standard |
$19617pa |
$27454pa |
#Comfortable Living |
$37829pa |
$50561pa |
# Assumed to include the occasional overseas travel
Age Pension levels in 2009 were
- Single $14,950
- Couple $29,932
The comparisons above are instructive. A couple wanting a comfortable ($50,561pa) income will not do that on a full aged pension ($24,579)
So, what level of income should you aim at in retirement?
The AMP “My Retirement Simulator” calculator has been used to broadly estimate how long various levels of income will last from age 65 for single male retiree who has invested in a Balanced Portfolio (70% growth assets and 30% Defensive assets)- (figures rounded to approx levels)
TotalRetirement assets at Age 65 |
Income desired –pa |
Age when |
$400,000 |
$40,000 |
84 |
$400,000 |
$50,000 |
77* |
$400,000 |
$60,000 |
74* |
$500,000 |
$40,000 |
88 |
$500,000 ** |
$50,000 |
80* |
$500,000 |
$60,000 |
76* |
$600,000 |
$40,000 |
93 |
$600,000 |
$50,000 |
84 |
$600,000 |
$60,000 |
80* |
*(Life expectancy for a 65-year-old male is 83.years)
** If your retirement assets at age 65 are likely to be $500000 and you wish to draw an income of $50,000 pa then the funds are estimated to run out at age 80, some 3 years before normal life expectancy for a male retiring now at age 65.
The Issue
Where do you currently sit in the above scenarios?If you don’t know, or wish to improve your position then you need assistance from an advisor to plan and regularly massage your strategy to reach your target. Click for more
What you already know
- Living costs if you were to retire now
- Years to retirement (at age 65 )
- Whether you will/should work part time after age 65
- Current superannuation entitlements (See Superannuation tab)
- Current non superannuation entitlements.(See Investments- Non Superannuation tab)
- Current annual contributions to super
- Current annual contributions to non super investments
An advisor can help you with
- Projected superannuation funds at retirement
- Projected non superannuation funds at retirement
- What income these assets might produce in retirement
- Projected living costs to retirement
- Shortfall-likely retirement living costs exceed likely income available
- Options available to avoid such shortfall now
- Potentially appropriate Options available at age 55, 60 and later
- Options in retirement to fund any shortfall in pre retirement savings.
- How to maximize Age Pension entitlements in retirement
- How to protect future retirement assets
There will be other issues to be considered in your circumstances.
- What issues above cause you concern?
- Have you acted on all of the above adequately and review each regularly?
- Minimize later (and more difficult) annual targets by acting now.
ACT IMMEDIATELY
- Review Superannuation, investment planning and estate planning sections to determine where other advantages can be gained.
- Enter your postcode for prompt contact with an experineced financial planner to clarify the above and identify and address any other issues specific to your circumstances.