How Long Will My Super Last After I Retire in Australia?

How Long Will My Super Last

“How long will my super last in Australia?” is a question many Aussies ask themselves when nearing retirement to ensure they live out their lives in comfort.

The answer is that it depends entirely on the age at which you retire, the amount you have saved, and your life circumstances, choices, and spending habits.

That said, read on to learn how to calculate your retirement amount based on your current earnings and make it last longer if need be!

How Long Will My Super Last in Australia?

Since there’s no single correct answer that suits most lifestyles, most Aussies rely on and compare their current savings with the average amount people near retirement have saved.

For instance, according to the Australian Bureau of Statistics, the mean average saved by men at 65 is $435,900, whereas women save around $381,700.

However, the Association of Superannuation Funds of Australia recommends that you have at least $430,000 at 60 years of age to live comfortably, which ultimately amounts to $45,962/year for singles and $64,771/year for couples over 65 (around 70% of your earnings).

If you need answers to questions such as “How much do I need to retire?”, “How much super will I have?”, and “How to grow my super?” check out our detailed article on the topic.

How to Use a Superannuation Retirement Calculator?

The best way to figure out if your super balance is on track to a comfortable post-work life is to use a third-party super calculator that takes into account the following factors:

  • Your current age, gender, and relationship status
  • Expected retirement age and salary
  • Employer contributions
  • Current super savings
  • Additional contributions
  • Changes that affect your super

As an example, if you are wondering: “How long will my super last in retirement?”, the government’s Moneysmart retirement planner considers all of the above to tell you that and also provide you with the income amount you will be receiving and how it will be split between your aged pension and superannuation funds, as illustrated below.

source: moneysmart.gov.au

To refine the results, Moneysmart can also include additional factors in its estimations, such as the retirement fees, investment options, and insurance costs you pay before and after retirement. Moreover, it can also consider the expected inflation rate, your age pension, additional assets, and any one-off expenses, like using your super to buy a house or a car.

How Can I Make My Super Last Longer?

What would happen if your super ran out during your final years? Thankfully, you don’t have to find out, as you can stretch it further by implementing the strategies outlined below:

  1. Delay your retirement—that way, you will ensure that your super fund receives additional contributions, and you will spend less time drawing from it;
  2. Reduce your expenses—adjust your lifestyle to spend less during your retirement to ensure you have more to spend during your latter years;
  3. Sort out your super funds—combine multiple accounts into one, review your insurance payments, and check on your super investments often;
  4. Access your money smartly—the safe option is to start a regular income stream without taking out a lump sum, and if you cannot avoid that, opt for a loan;
  5. Choose riskier investments—to significantly boost your super, invest aggressively into shares and property instead of choosing defensive assets like currencies;
  6. Downsize to a smaller home—by selling your existing house after retiring you can free up capital that can go into your super fund;
  7. Leave less to your family—unless truly necessary, decrease the financial legacy you leave to your loved ones to enjoy a carefree retirement;
  8. Contact a financial planner—expert planners can advise you on the best investment strategies so you reach your retirement goals faster.

Note: To stay on top of your super fund, look up the unique superannuation identifier that you can use to monitor your balance and contributions regularly.

Bottom Line

Planning for your retirement is a crucial consideration to ensure you enjoy the autumn of your life without disrupting your lifestyle or lacking anything. The key things to remember are to start saving early, make regular contributions, and invest in a diversified portfolio. Also, learn about the best Aussie super funds and how to choose one that best fits your needs.

FAQs:

1.Should you compare your fund’s performance with others?

Definitely! Compare several super funds to ensure you pick one with the best investment portfolios and a greater degree of control, as self-managed super funds (SMSFs) that allow you to choose how your money is invested often prove the best choice.

2.Should you combine accounts if you have more than one?

Consolidating your super accounts will save you both time and money, as you pay less in account fees, cut down on paperwork, and keep track of your balance far more easily.

3.Does your super keep growing after retirement?

It might, as your super remains invested during your retirement. Therefore, depending on the market changes and compounding returns, you may see increased income over the long term.

4.How much super do I need to retire at 60 in Australia?

According to the ASFA, Aussies need at least $430,000 for a comfortable retirement at 60 years of age. For more information, read the entire ‘How Long Will My Super Last?’ guide above.

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