How much is needed to maintain your standard of living in retirement?BY ANDREW MCKEAN | FRIDAY, 24 JAN 2025 12:32PM![]() Super Consumers Australia (SCA) has unveiled new savings targets to help Australians work out how much they'll need to save for a lengthy retirement, provided they own their home outright. For single retirees aged 65 planning to spend at a "mid-level" - $1650 per fortnight or $43,000 per year - SCA said $310,00 in savings would be required until age 90; the Age Pension would typically cover 67% of retirement expenses. For single retirees planning to spend at a "high-level" - $2270 per fortnight or $59,000 per year - estimates suggest they'd need $876,000 in savings; the Age Pension would typically cover 28% of expenses. For couples looking to spend at a mid-level - $2380 per fortnight or $62,000 per year - calculations show they'd need $421,000 in savings; the Age Pension would typically cover 70% of retirement expenses. On the higher end of the spectrum, for couples seeking to spend $3350 per fortnight - $87,000 per year, projections show they'd need to have saved $1.22 million; the Age Pension would typically cover 32% of expenses. For pre-retirees aged 55, living alone and planning to spend at a mid-level - $1890 per fortnight or $49,000 per year - forecasts suggest they'd need $395,000 in savings by age 65; about 67% of expenses would be covered by the Age Pension. For singles with greater spending ambitions - $2390 per fortnight or $62,000 per year - they'd need to have saved $846,000 by age 65 - the Age Pension would typically cover 28%. Meanwhile, for couples aiming to spend at a mid-level - $2770 per fortnight or $72,000 per year - they'd need to have saved $548,000 by age 65 - the Age Pension would typically cover 70% of retirement expenses. For couples after a more luxurious retirement - $3500 per fortnight or $91,000 per year - they'd need to have saved $1.12 million by age 65 - the Age Pension would typically cover 32% of retirement expenses. SCA said its savings targets could be considered more modest than what many would expect, as they've factored in the assumption that individuals will receive the Age Pension. "If you're spending at our mid-level for a single or couple, we estimate you'll typically have about 70% of your retirement income coming from the Age Pension, and your super and earnings on your super will cover the remaining 30%," SCA said. "If you're spending at our high level for a single or couple, we estimate that you'll be mostly self-funding your retirement. As you age, you'd typically become eligible for the Age Pension, and it makes up a larger percentage the older you get." Separately, SCA highlighted the struggles of retired renters, who have higher levels of poverty and financial stress compared to homeowners. "We've previously highlighted how rental assistance is insufficient for this growing group of Australians," the advocacy group said. "For this reason, our guidelines don't include targets for retired renters. "We think that systemic change, such as increased social housing and further increases to Commonwealth Rent Assistance, is more important to this group than savings targets." SCA chief executive Xavier O'Halloran said that consumer advice to contribute to super is often unrealistic for retirees who rent, adding "much more needs to be done" to create affordable housing if renters are to avoid falling into poverty in retirement. Related News |
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