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.