Many of us dream of a financial future where we retire early and live comfortably post-work. Retiring early is an attainable financial goal, but many people wonder, “how much super do I need to retire at 60?” While there is no solid answer to this question, certain variables contribute to it.
If you’ve always wanted to know how much super you need to retire at 60, read on for more advice.
If I want to retire at 60, how much super do I need individually or as a couple?
When it comes to retirement, there are no hard and fast rules about how much you need to have in super to retire. This number will look a little different for everyone. Still, the retirement standard from the Association of Superannuation Funds of Australia states that couples aged 67 (assuming that they own their home outright and are relatively healthy) would need $42,621 p.a. to account for modest spending, while singles would need $29,632. For comfortable spending, couples would need $65,445 p.a., while singles would need $46,494.
Everyone has different plans and goals for their retirement, meaning the amount of super they need will differ. As such, it’s better first to ask what your ideal retirement looks like before wondering how much you’ll need.
What does your ideal retirement look like?
Retirement looks a little different for everyone. One person might aspire to take numerous overseas trips, while another may be content in staying home and spending time with their children and grandchildren. Aside from your desired lifestyle in retirement, there are also considerable costs in retirement to contemplate. These may include:
- Paying off your mortgage
- Rent
- Renovating your home
- Travel
- Medical costs
Increasing your chances of retiring at 60
If you want to increase your chances of retiring at 60, there are a few ways you can do so.
Salary sacrificing
Salary sacrificing can be done at any age. This is when you make an arrangement with your employer to forego part of your salary or wages in return for your employer providing benefits or a similar value. One example of a salary sacrifice arrangement is having some of your wages paid directly into your super instead of to you. As these payments are classified as employer contributions, you are generally taxed at a lower rate, and they don’t impact any voluntary contributions you make.
Non-concessional contributions
Some people come across bulk sums of cash in their life. This might be in the form of inheritance, a large tax return or even a gift from a relative. Whatever the cause, consider making an after-tax contribution to your superannuation fund. These payments are called non-concessional contributions because you have already paid tax on the money. Currently, you can make up to $110,000 in non-concessional contributions each financial year.
Paying off your mortgage
Especially in today’s financial climate, paying off your mortgage might be a bit much to ask. However, it goes without saying that the smaller your mortgage is by the time you reach retirement age, the better off you’ll be. This will also remove the temptation to use your superannuation lump sum to pay off your mortgage, which can further deplete your retirement savings.
What are your retirement goals?
At Inovayt, our financial advisors make your retirement goals the key focus of our discussions. While it’s common to get caught up on a monetary value, we work with you to establish what you want to achieve in retirement. Regardless of the lifestyle you want after retirement, we’ll help you flesh out your goals first before working on building up your super fund. The sooner you start planning with a financial advisor, the more confident and comfortable you’ll be to retire at 60.
When can I access my super?
In Australia, there are a few ways you can access your super. You can withdraw your super:
- When you turn 65 (even if you haven’t retired)
- When you reach preservation age and retire, or
- Under the transition to retirement rules, while continuing to work.
Which option works best for you will differ based on your ideal retirement. However, our expert team of financial advisors are up to date with government rules and regulations surrounding retirement, so you don’t have to be. We’ll walk you through your options and devise a solution that best fits your retirement plan.
What do I need to look for in a good superannuation fund?
With so many choices of super funds on the market, it’s common to feel a little overwhelmed. It’s also easy to get sucked into the ‘deals’ you see on TV and in the media. Generally, if something seems too good to be true, it probably is.
Not only will your Inovayt financial advisor help you with retirement goals, but they also have the tools available to ensure that your super fund is performing to the best of its ability. We examine your super fund and cover considerations such as:
- Fees
- Insurances
- Investment options
- Services
These factors all play a crucial part in determining whether your super fund is working for you or if it’s time to switch.
Working with an Inovayt financial advisor
When you work with an Inovayt financial advisor, you’re opening the doors to the retirement you’re hoping for. Without talking to a financial advisor, there is a chance that you’re missing out on money you didn’t know that you could access.
Read our blog for more information on how a financial advisor can assist you in your retirement planning.
It’s never too soon to start thinking about retirement. Your super fund is one of the most significant investments you’ll make in life, as you are essentially investing in your future self! If you’re wondering how much super you’ll need to retire at 60, talking to an Inovayt financial advisor is the best place to start. Our expert team works with you to create a customised plan that meets all your retirement goals and advises the steps you’ll need to take to get there. Get in touch with our team today.
