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How Much Money Will I Need to Live on in Retirement?

Archer Gowland How Much Will I Need in Retirement?

As a busy professional, you work hard to meet the needs of your clients and to grow your team and business. However have you stopped to consider your own growth needs and how the business you are developing will fund your desired lifestyle both now and in the future?

While Australia is home to over 443,000 high net worth investors, we have one of the biggest gaps in the world when it comes to retirement saving. A third of even relatively well-off pre-retirees ($90,000+ household incomes), say they are not confident that they will be able to maintain a comfortable retirement. And while the average Australian expects to be in retirement for 23 years, most will run out of retirement savings after 10 years (Source: HSBC Future Retirement Report).

Funding your retirement – how much is enough?

The table below provides an estimate of how much money you will need to support a modest or comfortable retirement. It applies for people retiring at age 65 who will live to an average life expectancy of about 85.

ASFA Retirement Standard

Annual living
costs

Weekly living
costs

Couple - modest

$33,766

$648

Couple - Comfortable

$58,364

$1,119

Single - Modest

$23,469

$450

Single - Comfortable

$42,604

$817

 

Another way to estimate how much money you will need in retirement is to assume you need 67% (two thirds) of your income before you retire in order to maintain the same standard of living in retirement. This estimate is only suitable for high income earners. (Source: ASFA).

Compulsory retirement

It is worth noting that some professional services firms have compulsory retirement below 60 years of age. For younger partners / directors, superannuation cannot be accessed until age 60. If this situation relates to you, it is even more critical that other investment vehicles be put in place to provide you with an income in your early retirement years.

Want more information on how your can increase your wealth and protect your assets?

Instantly download the FREE Archer Gowland Guide (below) "Wealth Creation to Fund Your Ideal Lifestyle - A FREE Guide for Partners of Professional Services Firms". We provide an indication of how much you will need at retirement, the changes in ATO interpretation of partner remuneration, how to generate tax efficiencies, market opportunities, a self-assessment of your financial situation and how to establish your own personal wealth plan.

You are also welcome to contact Ian Walker from Archer Gowland on 07 3002 2699 for a free and confidential discussion regarding your personal situation.

Archer Gowland Wealth Creation and Financial Planning Guide for Partners and Directors of Professional Services Firms in Brisbane

Our promise to you - your contact details will remain confidential at all times. You will receive approximately one email per month with valuable information to improve your financial situation, however you can subscribe from this correspondence at any time.

PS. Sign up to receive the Archer Gowland Blog, regular accounting updates for business owners and professionals. Click here: http://blog.archergowland.com.au/.

   
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