Straight to content

A comfortable life…

Back to front page

Everyone wants to be comfortable in retirement and feel confident that our savings will not run out. But how much is enough?

What retirement lifestyle do you want to live?

The first critical factor in working out how much you need to save for retirement is deciding the type of activities you want to be involved in. If you want to buy a Harley or Winnebago and hit the road, or move to a luxury villa next to a golf course, then it’s likely your income needs will be quite different to someone who plans to stay at home and potter in the garden.

Lifestyle is a very personal choice, but your dreams still need to be paid for. You’ll need to save enough capital for any major purchases, such as a new car or home, as well as provide an income once you cease paid employment.

How much do I need?

As a rule of thumb, our experience is that $2,000,000 is required for a couple providing income of $100,000 per year after tax.

A good starting point is to calculate how much you need to meet basic living costs. You could use your current expenses as a guide, but keep in mind that these may change quite a bit in retirement depending on what you plan to do including domestic and international travel.

What is the best way to save for retirement?

There are many different strategies and methods to save for retirement. Superannuation is an obvious choice because it is specifically designed for retirement savings. There are significant tax-savings available both during your working life and in retirement when receiving a pension.

The downside of superannuation is that there are some restrictions on how to make contributions and the timing and method of withdrawals. For this reason, it may be appropriate to use some non-superannuation investments such as managed funds, term deposits or property or a combination of all four. There are advantages and disadvantages to every approach and strategy.

Good financial advice is critical both before and after you retire. Our team at Bongiorno can provide a detailed analysis of your situation. We can estimate the amount you need for your retirement based on your specific goals, needs and preferences. We can also investigate whether you are on track to reach this target and, if not, develop strategies that suit your individual circumstances to help you get there.

Back to front page