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Every Australian has a different idea of how they envision their retirement to look. It is important to ask yourself how much super will be enough for you to live the life you are aspiring to live.

When you retire you might want to dine out for dinner every week at a fancy restaurant or you might want to travel overseas every year. You might also want enough money to help your children and grandchildren or the opportunity to relax and enjoy life without having to worry about having money.

There might also be one-off costs such as purchasing a new car or placing a deposit on a retirement village. You also might need money to support you with any health issues that occur during retirement.

How much super will be enough?

It is super important for you to start thinking about saving for your retirement as early as possible. Don’t make the mistake of waiting until you’re 60. First of all, you should figure out how much money you think you’re going to need in retirement. Use this to figure out how much superannuation is going to be enough to get you through a happy retirement.

There are lots of different ways to figure out how much super will be enough for you in retirement, and lots of online calculators to help you.

It is estimated that that by the age of 65, a single person who wants a ‘comfortable’ lifestyle with annual living costs of $43,901 would need to have a lump sum of $545,000 in today’s monetary standards.

For couples a ‘comfortable’ lifestyle with annual living costs of $62,083, it is estimated that you will need a lump sum of $640,000 by the age of 65.

In contrast, the lump sums needed for a modest lifestyle are relatively low at $70,000 for singles and couples. This is because the base rate of the Age Pension and variety of other pension supplements is sufficient to meet much of the expenditure required at this budget level.

How much money will be required with inflation?

In 20 or 30 years from now, these numbers will look very different when you take the cost of living into account. However, the ‘Standard’ is updated four times a year to factor in the rising price of items like food and utility bills. It also looks at people’s changing lifestyle expectations and spending habits. Plus, the costs of things like health, travel, clothing and household goods.

As the cost of living goes up each year and things get more expensive, the calculations for how much you’ll need in retirement are adjusted.

Is it possible to rely on the Aged Pension?

If you’re thinking about whether you might be right with the aged pension, you might want to first have a look at the current rates. The maximum rate for the Age Pension is $860.60 for a single person per fortnight. If you are a couple, the rate is $648.70 each per fortnight.

This amount of money won’t leave a lot for retirement lifestyle choices. You can’t rely on the aged pension, to afford the life you’d like in retirement, you’ll need to put extra money into your super.

Add extra money into your super account now 

If you want to put extra money into your super, the first step to take would be to ask your employer about setting up a salary sacrifice arrangement for your super. You could find, depending on your salary, you may save on your tax obligations.

Superannuation is a long-term relationship and the more attention you give it, the greater potential it has. Even salary sacrificing a small amount right now for example; the cost of one takeaway lunch each week has the potential to make a big difference to your superannuation balance in the long term.

Look at your debts 

It is important to ask yourself if you will be entering retirement debt-free? The Australian Securities and Investments Commission (ASIC) undertook research into credit card lending. After reviewing 21.4 million credit card accounts, they found 18.5 per cent of people struggle with credit card debt. You do not have to be a part of this statistic if you take control of your credit card debt.

Repaying as much of your debts as possible before you retire, can make a big difference to your lifestyle and the funds you will have available in retirement. While building your retirement savings, also consider a plan to proactively clear your debt by using any free cash flow to reduce the amount you owe to strengthen your financial position. You may also want to consider any benefits gained from rolling your debts into one or using another provider that offers lower rates and fees.

Review your investments approach

By taking a look at how your super is invested could make a huge different to your retirement savings goals. If you still have many years left in the workforce, you may want to look at what your risk appetite is, and consider a higher risk, higher return approach to your investment strategy.