Retirees will need a bit more money in their nest eggs to have a comfortable twilight years. (Source: Getty)
The amount of money you’d need each year to have a comfortable retirement has gone up. The Association of Superannuation Funds of Australia (AFSA) said older Aussies are being squeezed by “heightened price pressures” across many areas.
A poll of nearly 8,500 Yahoo Finance readers found 65 per cent are worried they won’t have enough money in their super to retire comfortably. According to ASFA, couples around 65 will now need $75,319 per year to enjoy their twilight years, while a single person would need $53,289 per year.
ASFA CEO Mary Delahunty said it’s getting harder for retirees to make their money go the distance.
“We continue to see steep cost-of-living increases for retirees. Superannuation matters more than ever in delivering the dignified retirement Australians deserve,” she said.
ASFA’s figures from last year showed that a couple needed $73,337 per year, and a single person would need $52,085 for a comfortable retirement.
That style of retirement is defined as one where retirees can afford a broad range of leisure and recreational activities and have a good standard of living.
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The association said there have been several goods and services that have gone up in price just in the last quarter alone that have put a strain on retirees’ finances.
Private health insurance jumped 3.7 per cent, which was the largest quarterly increase since 2018.
Additionally, electricity prices lifted 8.1 per cent, which came after a 16.3 per cent increase in the previous quarter.
Meanwhile, in the grocery department, fruit and vegetables rose 4.3 per cent in price.
The only good news for older Aussies was that fuel prices fell 3.4 per cent due to lower global oil prices.
Delahunty said people who have a few decades left of working should be doing everything they can to make their superannuation as healthy as possible.
On July 1, the mandatory employer contribution rate went from 11.5 per cent to 12 per cent.
But the ASFA CEO said that Aussies can also contribute to their nest egg if they have some spare cash.
“Voluntary contributions to super, with their significant tax benefits, can also make a big difference to those wanting to feel more certain about the future,” she said.
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“Contributing extra to super can help some people ensure they won’t have to downgrade the lifestyle they’ve become accustomed to when they retire, whether that’s having a new iPhone and access to streaming, or the other pleasures of modern life.”
ASFA’s most recent figures revealed a single homeowner would need $595,000 in their superannuation fund by age 67. That jumps to $690,000 for a couple.
Those figures are based on the retirees drawing down all their capital and receiving a part Age Pension from the government.
If you’re younger than 67 and wondering whether you’re on track for that amount, ASFA’ Super Balance Detective Calculator has calculated how much you would need to have at different ages.
These calculations are based on a single person receiving a relatively modest wage of $65,000 a year.
25: $26,000
30: $66,500
35: $111,500
40: $168,000
45: $226,000
50: $296,000
55: $377,000
60: $469,000
65: $571,000
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