Do I Have Enough Superannuation?

The answer, quite simply is, IT DEPENDS!

Some of the factors that need to be taken into account when determining if a person will have enough money to retire include:

When do you intend to retire?

In other words, how far off is your retirement. Generally the more time a person has to accumulate wealth prior to retirement, the better chance they have of actually having enough money when they get to retirement.

How much income would you like to receive in retirement?

The amount of income a person would like to receive in retirement has a direct relationship to the amount of capital they will require to have available for investment.

Am I seeking to supplement my own income with Government benefits?

The Government provides income support to those members of the community who don't have the resources to fund their own retirements. This is usually provided in the form of the age pension for those who qualify. The age pension, or even a part age pension, may go at least part of the way towards meeting your income needs in retirement. But remember, entitlement to the age pension will be influenced by the level of assets and other income that you have.

How long do you expect to be in retirement?

This is a question that is very difficult to answer because none of us know just how long we will live. Naturally the longer a person lives, the longer their money has to last in order to fund their retirement income needs.

What about the next generation?

Do you intend to have all or a portion of your capital available for distribution to the next generation, or are you willing to allow for your capital to run down during your retirement? Where a person plans to leave a significant legacy for the next generation they generally need to have more capital available for invest for their retirement income than a person who is willing to run down their capital.

A guide to the amount of capital required

The following table provides an estimate of the amount of capital you will require in order to generate your desired level of income in retirement. The multiples used assume that you have an average life expectancy and that your capital will be allowed to run down over your retirement years. By way of illustration, if you wish to retire at 60 years of age and would like an income of $35,000 per annum (excluding any age pension), then you will need to have approximately $612,500 available to invest to provide that level of income.