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How much do I need?

There are many studies and estimates on what is the right amount of super to have in retirement.  Some estimate having an income equal to 40 per cent of your pre-retirement salary. Most of us want at least 60 per cent.  So if you earn $50,000 now, a starting point might be to think of a retirement income of about $30,000 a year. [2] And if you intend to be in retirement for 20 years, that’s a super balance of over $600,000 (excluding any growth / tax assumptions).

While you usually don’t spend as much in retirement as in pre-retirement, you still want money to enjoy all those extra hours you have on your hands. Going out for dinner, enjoying the theatre, joining clubs and travel may constitute your retirement lifestyle.  But these things cost money.  If you don’t to save enough to fund your own retirement, you may be able to receive an allocation from the government pension, but don’t think that this will deliver the lifestyle you desire.  [3]

Who can contribute to super?

If you are in the workforce and aged under 70, you are entitled to contribute to a superannuation fund. There are also other circumstances under which you can contribute.

  • If you are on parental leave and were in a super fund before this leave and have been out of the workforce for less than seven years.
  • If you are in receipt of the Baby Bonus.
  • If you have worked for at least 10 hours a week for the past two years.
  • If you have had to stop work because of physical or mental ill health.
  • If you are a non-working or low-income (less than $13,800pa) spouse, your partner can contribute up to $3,000 a year to your super fund.

How much should I be putting into super?

The time spent out of paid work, and part-time and casual employment patterns all contribute to women having less super.  In real terms, women generally retire with about $73,000 in super – that’s half the super of men.  [4] And with women living longer than men on average, they need to fund a longer retirement with much less money.

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  • Well-written piece! I’ll definitely be sharing this with others

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  • I’d love more super too, but never liked the idea of putting more of my own money into it, just never trust the government, they can change the rules at the drop of a hat.

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  • More super means you get to live in relative financial security in your older ages

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  • Super is seen as so boring, but it’s very improtant.

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  • Great advice even now, I’ll be more wary of how I allocate it

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  • I cashed my superannuation in quite a few years ago. I had no choice, I lost my job and had a couple of huge expenses come in

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  • I know I won’t have enough super to live on after retirement. Just another Centrelink bludger is what I’ll become

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  • I think the plan if retiring and being able to live off your superannuation in retirement is only something that happens for the highly paid rich people. I know myself and my partner will never have enough super yo live off

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  • I’ve just returned to work part time from maternity leave. And my super is miniscule. I don’t know if it will even cover the fees!

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  • Such an important issue for everyone but especially women.

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  • yes it can be scary to think that your super is all that you will have to fall back on one day.

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  • I don’t have any super whatsoever! Lots of people live ok on the aged pension, I’m hoping to Ve one of them

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  • I don’t have any super, I cashed it in during a financial crises a while ago. It didn’t use to worry me, but now I’m getting closer to retirement age, I am starting to stress

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  • Thanks for the information here, very helpful.

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  • That was an interesting article! Thanks for sharing!

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  • Really very good knowledge to know! Thanks for sharing this article!

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  • Thanks for sharing this article and information; so important to have good super.


    • Do regular check up of super and all other funds.

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  • I worked at one stage for a company that didn’t pay any super, I queried this & tried repeatedly to follow it up, eventually I left after 2 years & when super still wasn’t forthcoming I contacted the ATO…. I ended up with my super.

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  • About ten years ago the average Australian needed about a million dollars in super to be a self funded retiree and live comfortably, with the increasing life expectancy and increase in the cost of living that amount just doesn’t seem enough.

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  • Working part time my super is less also. I know I should be contributing more into super myself but I have other needs for that money too!

    Reply

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