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This is how much you really need to retire comfortably

·Personal Finance Editor
·3-min read
A couple looking through papers and at a computer screen to demonstrate people thinking about their retirement.
How much do you really need to retire? (Source: Getty)

The dream of having a comfortable retirement using superannuation has become increasingly out of reach for many Australians.

YouGov research commissioned by wealth platform Dacxi has found that more than half (54 per cent) of Aussies don’t believe they’ll ever be able to retire comfortably using their superannuation.

Australians have around $3.5 trillion invested as superannuation assets, but Aussies are still feeling skittish about the prospect of retirement.

In fact, the Dacxi research found just 29 per cent of Aussies said they would be able to retire comfortably on their superannuation by the age of 65.

The Association of Superannuation Funds of Australia (ASFA)’s estimate of annual expenses for a couple retiring comfortably at 65 is $64,771 a year (if you own your own home).

Women were more likely than men to be pessimistic about their superannuation, with 64 per cent saying they couldn’t rely on their superannuation to retire comfortably, compared to 45 per cent of men.

So, how much do you need for retirement?

If you own your home, you will be in a better position for retirement.

Super Consumers Australia recently released new retirement-savings forecasts for homeowners, finding that you may need as much as $1 million if you are a couple and want to spend about $75,000 a year.

If you’re single and want to live on a more modest $29,000 you’ll need $73,000 on top of what you’ll get from the Aged Pension.

A chart demonstrating the savings targets for retirees.
(Source: Super Consumers Australia)

“Among the most important financial questions retirement-planning Australians face is how much they need to save and what income those savings will deliver in retirement,” Super Consumers Australia director Xavier O’Halloran said.

“These new retirement targets are designed to help people answer these questions.

“They provide a solid ‘rule of thumb’ for what is needed to maintain your living standards when you’re retired.”

What if you want a luxury retirement?

So, what if you are in a couple, own your home and still want to spend more than $75,000 a year in retirement?

Dacxi research found 23 per cent of Aussies said having a high-performance investment strategy was the best indicator of their ability to grow wealth.

However, only 5 per cent of Aussies felt having a financial planner was a good indicator of one’s ability to grow wealth.

There are a number of factors that contribute to this, including the cost of financial advice.

“But the other known factor that’s less easily quantified is the accessibility of both financial education and suitable investment opportunities,” Dacxi CEO Ian Lowe said.

Generational wealth also looks set to play its part in the path to wealth and retirement for many into the future.

In fact, 24 per cent of Aussies used their family’s wealth as an indicator of their ability to grow their wealth, while more than 35 per cent said they were taking into consideration any inheritance(s) from any family members when calculating their own retirement.

“When it comes to wealth in retirement, our research indicates that most Australians are now relying on their own investment knowledge and the wealth of their immediate family to reach their retirement goal,” Lowe said.

“The first takeaway is that superannuation alone is widely believed to not provide for a comfortable retirement.”

Lowe said investors were more motivated than ever before to explore new strategies and invest across a broader spectrum of asset classes.

“The second is the need for access to sound financial educational resources that will help investors make informed decisions,” he said.

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