Help if you struggle to define how much super is enough for you

“I’m personally struggling to define what enough is”

We heard that comment about the struggle to set an appropriate super saving target at our recent ‘Freedom in retirement’ seminar series.

And it can be a common struggle.

For instance, are you struggling to define…

• How much income you’ll need for a financial secure 3rd Act?
• How long that income must last?
• And how much superannuation can generate that income?

And if you are struggling with these questions, this article offers some help.

Below we describe three ways to help define what enough super may be for you.

3 ways to help you define what enough super is for you

The three ways are:

1. View ASFA’s standard for a comfortable retirement
2. Do a simple budget for your likely annual income needs
3. Ask a financial planner.

We explain these three ways below.

So first of all:

1. View ASFA’s standard for a comfortable retirement

ASFA is the Australian Superannuation Funds Association, the industry body for super funds and their members. ASFA’s website reveals (for free) how much money singles and couples may need to spend each year in retirement to enjoy a comfortable retirement.

View ASFA’s standard for a comfortable retirement today

However ASFA’s amounts won’t be specific to your 3rd Act. So next you can…

2. Do a simple budget for your likely annual income needs

And you can start your budget by asking yourself some simple questions such as:

1. What expenses do I incur now but won’t in my 3rd Act
2. What costs can I cut or sensibly reduce?
3. Will I incur new costs?
4. What discounts or benefits could I get?
5. Will I downsize my living arrangements?
6. Will I be debt free?
7. Must I upgrade my car or do repairs around the home?

To get your own budget, enter your answers into our expenses calculator (on the PSSap website). Don’t forget food, clothing and other essentials, plus hobbies and travel.

Your budget should tell you how much your likely annual income needs may be in your 3rd Act.

(Which is the minimum annual income you may need to spend…)

But even with a budget you may still struggle with more questions than answers.

So then you can…

3. Ask a financial planner

But which financial planner should you ask?

You may like to consider the personal financial advisory service offered to members of the Australian Government super schemes. See our Financial planning section for more information.

What will you do?

Whatever you may do, we encourage you to avoid the struggle by starting today:

1. View ASFA’s standard for a comfortable retirement
2. Do a simple budget for your likely annual income needs
3. Ask a financial planner.

General advice

This 3rd Act article provides general information only. It has not taken account of your personal objectives, financial situation or needs. Before acting on any general information or advice, you should have regard to your own objectives, financial situation and needs.