Dear Vanessa,
My husband and I are in the late 1950s and we are starting to think seriously about retirement. To be honest, it is frightening. We would like to stop working at the age of 65, but how do we know if we have enough? What if we retire and then realize that we have made a big mistake?
We have paid off our mortgage and have $ 750,000 in pension savings between us. We both earn a considerable income, but the more we look at retirement, the more anxious we feel. We continue to see different figures – some say we need $ 1 million, others say that we can make ends meet much less.
Our biggest fear is to give up work too quickly and no more money if we are too old to do something about it. What if we are confronted with unexpected medical costs? What if we want to help our children with a house payment? We also do not know how much we will actually spend when we stop working – everyone says that costs fall in retirement, but what if they don't?
Do we have to do something else with our super? Do we have to shrink? Invest more aggressively? Keep working longer? We feel stuck. How do we find out how much we really need?
Jillian.
Dear Jillian,
First get deep breath – you ask all the right questions, and you are far from only in these fears. The idea of not having money anymore with retirement is one of the biggest concerns I hear, and for a good reason. As soon as you leave the work, the safety net of a steady wage check has disappeared. But the good news? There is a way to get clarity.
Leading money trainer Vanessa Stoykov
Let's start with the numbers. The Association of Superanniety Funds of Australia (ASFA) estimates that a pair needs around $ 72,148 per year for a comfortable pension (from 2023). This assumes that you own your house and qualify for at least a partial age pension later.
Now let's perform some raw figures. With $ 750,000 in pension savings, if you record 5 percent per year, that is $ 37,500 a year – only about half of the ASFA figure.
You will not be eligible for the full age pension with $ 750,000 in assets. Based on estimates you may receive around $ 23,000 a year, but this varies depending on your circumstances. You can view the Centrelink pension scatter to get a more accurate figure.
This means that your total income cannot arise with what is considered a comfortable pension, depending on your circumstances.
The key is now to ensure that your savings continue to support your lifestyle during the pension. So what can you do?
• Follow your current expenses – most people do not know what they actually spend. Try to use a budgeting app or spreadsheet for a few months to get a real picture.
• Test drive Your pension and you think you need $ 72,000 a year, now try to live on that amount and see how it feels.
• Consider earning part-time and earning $ 20,000 a year for a few years, can make a huge difference in stretching your super.
• Look at your investment strategy and your super option with a low risk may not grow enough to support recordings. Speaking with a consultant about investment options that balance risk and return is a smart move.
• Get professional advice – I strongly recommend talking to a financial adviser to get personalized guidelines about your situation. I offer a free matching service to help you find the right adviser for your needs.
Finally, remember this: pension is not about a magical number – it's about how you want to live. Instead of fearing what could go wrong, you start with plans for what could go well.
You have time, options and the opportunity to shape your future. Take control now and you will not just retire, you will thrive.
Vanessa.
