Super Consumers said the age pension and strong super returns are helping keep people on track to meet their retirement income needs, as it released updated savings targets to reflect changes in the cost of living and the age pension.
“Our retirement targets provide home-owning Australians with a ‘rule of thumb’ for what is needed to maintain living standards in retirement, based on actual retiree spending,” Super Consumers Australia chief executive Xavier O’Halloran said.
“Our targets show a typical single needs around $310,000 in super, and a couple needs around $420,000 in super, when they retire to maintain their living standards through their retirement. Combined with income from the age pension, homeowners with this amount of super can reliably provide an annual amount of $43,000 and $62,000 until age 90.”
The figures are based on the assumption that retirees own their own homes outright or otherwise do not need to pay rent or a mortgage.
They also increase for pre-retirees, with a single aged 55 needing around $395,000 in super, and a couple needing around $548,000.
“Most people will access the age pension at some point in retirement. When combined with earnings from super, over the long-term the retirement system is designed to provide significant protection against cost-of-living increases. These figures are designed to give people greater confidence to enjoy the income they’ll receive in retirement,” O’Halloran said.
“The savings targets for 65-year-olds with medium or high spending needs are respectively 10 and 15 per cent higher than last year. Positively, people with their super in a typical balanced fund would have seen their balances grow by about 13 per cent over the same time period, helping to cover the increases. This means people might be closer than they think to their retirement savings goals.”
He added that the targets are designed to “get people more engaged with retirement planning”.
“The next step is to get a more personalised picture of what you need to save and how to reach your goals,” O’Halloran added.
“The following resources are there to help: Moneysmart, Financial Information Service, independent financial advice.”
