When it comes to superannuation size does count. As accountants and financial planners we are often asked “Will I have enough superannuation in retirement?”. According to the SMSF Association for a single person to have a “comfortable” retirement they will need to have an annual income of around $42,861, a couple will need an income of around $58,784. They estimate that the lump sum needed to support these comfortable retirement incomes are $640,000 for a couple and $545,000 for a single. These amounts are for a life expectancy of about 85, so if you live longer than 85 years these lump sums still won’t be enough. (Did you know that 50% of babies born today are expected to live beyond 100 years?).
The lesson is that you need to start to plan for your retirement well before the time comes. Just because your employer is making superannuation contributions on your behalf does not mean that you will have sufficient in superannuation to fund a comfortable or even a modest retirement. If you want to have a better than comfortable retirement you will of course need a bigger lump sum. Don’t let your retirement income come down to luck, put in a plan and have a strategy in place to ensure that your years in retirement are the best of your life, after all most people are living longer and spending up to a quarter of their lives in retirement.
If you are unsure whether you are on track to have enough to fund your retirement please make an appointment to see one of our financial planners. They have the tools and experience to help you plan for your retirement and maximise your benefits.