Revealed: The amount of super you need to retire comfortably

The rising cost of food, fuel, holidays and hospital and medical expenses has pushed up the amount of money Australians need to live a comfortable retirement. Here’s how to get ahead.

Exclusive: The rising cost of essentials including food, fuel, holidays and medical expenses has pushed up the amount of money Australians need to live a comfortable retirement.

The Association of Superannuation Funds of Australia has released new figures from the December quarter to show how much money Australians need once they stop work at age 67.

It found for couples to live a comfortable retirement — assuming they own their home outright and are relatively healthy — they need $60,977 per year and singles need $43,317.

This is an increase of 0.2 and 0.3 per cent respectively.

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The biggest rises hitting the hip pocket include lamb (+11.2 per cent), fuel (+6.7 per cent),

domestic holidays (+6.2 per cent), hospital and medical expenses (+ 4.2 per cent) and fish (+3.3 per cent).

ASFA’s chief executive Dr Martin Fahy said retirees were exposed to fluctuating costs once they stop work.

“This includes increasing food prices during the drought and increasing fuel costs which are the same challenges the rest of us experience,” he said.

“It’s really important when you are doing retirement planning that you recognise you don’t retire in a world of fixed prices.”

Living costs have increased pushing up the amount of money Australians need to live comfortably in retirement.

Dr Fahy also suggested retirees reassess their spending as prices rise.

“Have a good idea of what your budget is but sometimes as a retiree you might want to go on holidays slightly off season,” he said.

“You don’t need to be frugal but you need to be at least prudent at the way you compare and they way you shop.”

ASFA figures showed in order to live a comfortable retirement which includes taking holidays and having a good standard of living such as driving a reasonable car and having private health insurance and receive a part pension couples need $640,000 at age 67.

For singles they need $540,000.

AustralianSuper’s group executive of product, brand and reputation Paul Schroder said choosing the right retirement fund could make a huge difference when you draw down on your super.

“Picking a top performing fund over the long term is vital as a 1 per cent outperformance can over a lifetime deliver an additional almost $100,000 in retirement,” he said.

“Contributing more when you can could add around $175,000 at retirement for a 25-year-old by putting an extra $50 a month into their super — just $600 a year.

“While a 35-year-old doing the same will have an extra $79,000 and a 45-year-old will have an extra $32,000.”

@sophieelsworth

Originally published as Revealed: The amount of super you need to retire comfortably