How Much Money Do You Need to Retire?
By Dale Gillham | Published 13 March 2018
Are you working harder than necessary to have sufficient savings for your retirement? I’m finding, on a daily basis, that most people who ask for information about building wealth in the share market are worried about whether they’ll have enough, but many either have no idea or just a vague notion of how much they’ll need.
Research released only two years ago said most retirees don’t have enough for a comfortable retirement and that we all need at least $1 million dollars to retire. But if retirees don’t have enough, why are half of all retirees on welfare spending less than the age pension? And, how stressed are they?
When reviewing the research conducted by the Melbourne Institute, it indicated that for Australians aged over 70, only 13 per cent experienced financial stress. Interestingly, ten years prior, the data indicated that 10 per cent in this age group experienced financial stress.
While there is a difference between then and now, overall it’s small.
So do we need as much as we’re being told? Data indicates that a couple in retirement need around $60,000 per annum to live a comfortable retirement. But spending declines dramatically after we turn 80.
Perhaps a good way to get a clearer picture about what you need, is to start asking people those who are already retired, what you might need.
So do Australians really need to work harder to accumulate more wealth?
When estimating the amount you will need, remember to add two to three per cent to cover inflation, each year from now until you expect to retire. Also review current expenses and remove or reduce the items you won’t require when you are retired.
The Government's Money Smart website provides calculators that can assist you to estimate what you’ll have in retirement. So, start doing your research today!
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