Latest news with #RetirementStandard
Perth Now
23-06-2025
- Business
- Perth Now
The annual amount you now need to retire — and it's not $1m
If you're hoping to draw a line under your working life come the new financial year next week — but you're yet to run the numbers on exactly how much money you're likely to splash about each year in retirement — rest easy. The Association of Superannuation Funds of Australia is still doing the heavy lifting for you and reckons a so-called 'comfortable' standard of living will now set couples in their mid-60s back $73,875 a year. For a single, the group's latest quarterly snapshot of the cost of living in retirement, released last week, is $52,383. For comparison, Centrelink's full age pension is currently $43,753 for couples and $29,024 for singles. The cost of a comfortable retirement includes top-level health insurance, fast internet and streaming services, an above-average car, regular leisure activities, occasional restaurant meals, regular wardrobe updates, home repairs or upgrades, annual domestic travel and an overseas trip every seven years. It also assumes the retirees own their own home. When viewed as a total nest egg balance, a couple hoping to live a little and aim for a comfortable retirement will need $690,000. For a single, it's $595,000. But those approaching retirement without any of these magic numbers in their nest egg shouldn't panic. The figures often work in conjunction with supplemental income through a part-pension, and financial advisers also say it's important to remember that annual spending falls as retirees get older. The annual figures are up 1.6 per cent from the March quarter as the higher cost of meat, seafood, fruit and vegetables and electricity offset a near 8 per cent fall in the price of international travel and accommodation as peak season demand waned for trips to Europe in the December holiday period. ASFA chief executive Mary Delahunty said while retirees were enjoying some relief from slowing inflation, essentials costs remained a concern. 'Australians in retirement are starting to benefit from a slowdown in inflation, but the prices of essentials are still rising,' Ms Delahunty said. 'It's a timely reminder that achieving a dignified retirement takes planning, and superannuation plays a critical role in making that possible.' A so-called modest standard of living for retirees now costs $48,184 for couples and $33,386 for singles. That means basic health insurance and limited gap payments, basic mobile, modest internet data allowance, owning a cheaper, older, more basic car, few leisure or travel activities, limited home repairs and keeping a close eye on utility costs. ASFA has been generating its Retirement Standard for two decades. In a sign of the times as homeownership becomes beyond the reach of many people, with an increasing number of Australians likely to be renting in retirement, it has now added budgets for retirees living at the modest level in private rentals to the benchmark guide. It estimates a single renter aged around 65 would need $46,663 a year, with a couple needing $64,259, to retire at a modest level. The lump sums at retirement needed are estimated to be $340,000 for a single and $385,000 for a couple. It said the budgets were significantly above what is provided by the full age pension and highlight the key role superannuation plays for retirees who rent. 'These new figures demonstrate how important it is that we build more homes in this country so Australians can buy a house or an apartment,' Ms Delahunty said.. 'They also illustrate how super can be the difference between hardship and stability later in life, especially for renters, which is why we need to keep it safe for retirement.'
7NEWS
18-06-2025
- Business
- 7NEWS
Superannuation Guarantee increase to 12 per cent set to give Australians thousands more in retirement boost
Close to 10 million Australians are weeks away from a superannuation boost that experts believe will place young workers on track for a 'comfortable retirement'. The Superannuation Guarantee — the minimum amount your employer is legally required to pay towards your super every year — will increase from July 1. The guarantee is currently at 11.5 per cent of your annual earnings, but will jump to 12 per cent in the new financial year. A 30-year-old worker earning $75,000 a year is set to be $20,000 better off when they retire, the Association of Superannuation Funds of Australia (ASFA) calculates. It means that the worker will retire with $610,000 in super savings, $15,000 above what a single homeowner needs for a comfortable retirement that includes a budget for top level health insurance, a reasonable car that is maintained, regular leisure activities and holidays, and the confidence to use air conditioning and other utilities. It is the 'first time' ASFA has projected that a 30-year-old on a median wage will be on track to achieve that standard of living when they leave the workforce. 'This is a major milestone in Australia's retirement system,' association chief executive Mary Delahunty said. 'With the super guarantee increase to 12 per cent, we are seeing super fulfil its objective of providing a dignified retirement for ordinary Australians.' Check your pay slip CPA Australia's superannuation lead Richard Webb said the increase 'could ultimately be worth thousands' by retirement, but workers should have a word with their employer before the new financial year. 'If your employment contract includes a total remuneration package including super, this could mean less take-home pay at the end of the month,' Webb said. 'However, for those on award or enterprise agreements, your pay agreement is more likely to be a salary, which means the change will not affect your take-home pay. 'It's a good idea to check with your employer to see how they view the changes and what it means for you. 'Otherwise, you might get a shock if your take-home pay is a little less than expected.' Costs in retirement ASFA's latest Retirement Standard benchmark found the cost of funding a comfortable retirement had increased 1.6 per cent in the last year, with most homeowning couples needing $73,875 annually and most singles who own a dwelling needing $52,383. Single renters aged 65 need about $46,663 annually for a modest retirement, while couples leasing their home need about $64,259. The super lump sum needed for a modest standard of living (basic health insurance, a cheaper car, infrequent leisure activities, bill watching and utility sacrifices, and limited meals at restaurants) is $340,000 for a single person renting privately and $385,000 for a couple. 'These new figures demonstrate how important it is that we build more homes in this country so Australians can buy a house or an apartment,' Delahunty said. 'They also illustrate how super can be the difference between hardship and stability later in life, especially for renters, which is why we need to keep it safe for retirement.' The association said that overall inflation pressures had eased, budgets were being stretched by increases in fruit and vegetables (6.6 per cent), meat and seafood (4.3 per cent) and electricity prices. 'Australians in retirement are starting to benefit from a slowdown in inflation, but the prices of essentials are still rising,' Delahunty said. 'It's a timely reminder that achieving a dignified retirement takes planning, and superannuation plays a critical role in making that possible.' The Super Members Council said the guarantee boost will help cover bills, trips away and financial security. 'More super means more freedom, more choices and more opportunities to do the things you love,' council chief executive Misha Schubert said. Super health check Australia's super guarantee was introduced in 1992. At the time, the mandatory contribution rate was just 3 per cent. With July marking the final legislated increase to the SG since 2021, Webb said it is important for Australians to ensure they are in control of the super (you can find more super tips here). 'It's never too late to look into growing your retirement savings, including making additional contributions to your fund before the end of the financial year,' Webb said. And, with the , it could also be time to take a look at what you might be missing out on.
Yahoo
12-03-2025
- Business
- Yahoo
Superannuation warning as new $73,000 retirement reality exposed
The amount of money Australians need to retire comfortably has increased slightly over the last 12 months, following a rough couple of years of high inflation. But new figures reveal pressures have finally started to ease. The Association of Superannuation Funds of Australia (ASFA) found couples aged 65 now need $73,077 per year combined to achieve a comfortable retirement, while singles need $51,805. This assumes the retiree owns their own home outright. The budgets for a modest retirement were basically unchanged at $47,470 for couples and $32,897 for singles. The super body said the new figures highlighted that Aussies likely needed to top up their superannuation with voluntary contributions to ensure they achieve the kind of retirement they need. RELATED Retirement offer for Australians from idyllic island with no tax offers: 'Enjoy' Surprise winner after Woolworths and Aldi comparison grocery shop: 'More expensive' 'Red flag' NAB banker noticed before blocking $440,000 payment: 'Didn't add up' The cost of a comfortable lifestyle rose by around 1.3 per cent over the last 12 months, which was just over half of the Consumer Price Index of 2.4 per cent over the same period. Retiree costs rose by 0.1 per cent in the December quarter, with falling electricity prices helping to keep costs low. Electricity prices fell 9.9 per cent in the quarter, largely driven by commonwealth energy rebates. ASFA CEO Mary Delahunty said there had been a "substantial easing in price for the goods and services' that retirees purchase.'However, the last couple of years of high inflation are still weighing on their ability to fund a comfortable retirement,' she said. Insurance costs rose 1.1 per cent, which was the weakest quarterly rise since June 2022, while food prices were up 3 per cent. Domestic holiday travel and accommodation rose by 5.7 per cent due to increased demand. The superannuation body calculated the superannuation lump sums needed for a comfortable retirement at age 67 were $690,000 for a couple and $595,000 for a single. It's worth noting that Super Consumers has put this amount lower at $420,000 for a couple and $310,000 for a single to maintain their living standards in retirement, combined with the age pension. Delahunty said recent strong investment returns were helping retirees and those planning for retirement to reach their desired retirement lifestyles, but warned topping up superannuation would be necessary. 'The most recent Retirement Standard budgets reinforce the fact that Australians need both compulsory superannuation and voluntary contributions which are preserved until retirement to have the sort of retirement they need and deserve,' Delahunty said. Balanced super funds showed a typical return of at least 10.5 per cent in 2024, with some funds recording nearly 12 per cent. SuperRatings found monthly returns turned negative in February, which marked the second negative monthly return for the financial year, as the risks of US President Donald Trump's tariffs loomed. Despite the Reserve Bank cutting interest rates in February, both Australian and international share markets, which are key drivers of super fund returns, declined over the month. 'The impact of tariffs on China and potential flow on effects to the Australian economy in particular influenced Australian share expectations, offsetting any potential benefit from the reduction in interest rates,' the group said. While markets are more turbulent, SuperRatings executive director Kirby Rappell said it was important for Aussies to remember that superannuation was about long-term outcomes.
