Latest news with #nestegg
The Australian
05-08-2025
- Business
- The Australian
How much super you need to retire comfortably for your age
The Australian Business Network Building a big enough nest egg to retire comfortably is a key goal for millions of Australians, and today's young adults are much better placed than their parents to achieve it. An analysis of average super account balances, and the nest eggs required for a comfortable retirement, suggests Australians aged under 30 and earning median wages will have enough in superannuation to allow them to retire in comfort. 'Comfortable' is the key word, and its definition can vary widely, but broadly-accepted numbers come from the Association of Superannuation Funds of Australia's ASFA Retirement Standard, a benchmark study of retiree spending needs that has been produced quarterly for 21 years. ASFA has estimated that to retire comfortably on a mix of super and a part-age pension, a new retiree needs $595,000 as a single homeowner and $690,000 for a homeowner couple combined. This will deliver them annual incomes of $52,383 and $73,875, respectively, and cover living costs including private health insurance, a 'reasonable' car, fast telecommunications, regular leisure activities, domestic holidays annually and an international holiday every seven years. While the July 1 rise to 12 per cent compulsory employer superannuation guarantee contributions gives young workers a full career of solid super injections, older generations have not benefited from that and many have balances that struggle to reach a comfortable level. ASFA chief executive Mary Delahunty said for Australians aged between 60 and 64, men had an average super balance near $395,000 and women had $315,000. 'The median figures are lower, $220,000 for males and $163,000 for females,' she said. However, the trend is improving and the fact that many retirees live with a partner helps them combine their nest eggs to deliver a decent retirement. 'Most retirees aged 65 today are in a couple household,' Ms Delahunty said. 'Based on the combined super balance and other financial assets held, just over 30 per cent of retirees are at the comfortable standard, and that's up from 25 per cent a decade ago,' she said. 'By 2050 that percentage will increase to around 50 per cent for couples.' Super funds provide projections of members' final super balances on websites and in annual statements, and there are other online calculators that help people work out if their balance today is high enough. For example, ASFA's Super Detective tool has estimated that if you are aged 25 today and have $26,000 in super, you are on track to retire comfortably at the pension age of 67. If you're 30, the figure jumps to $66,500, and it gets dramatically larger after that. Today's 40-year-olds need a balance of $168,000, those aged 50 require $296,000 and someone who has just turned 60 needs $469,000, although all these calculations are based on a relatively modest wage of $65,000 a year. JBS Jenny Financial Strategists chief executive Jenny Brown said it was 'absolutely' important to know what super balance you would need and how you were placed towards reaching it. 'It's a matter of working out what we call your financial freedom number – how much do you need to retire?' she said. 'That's working out what you are spending and what lifestyle you want when you retire. 'And what age is retirement? Is it 60, 65 or 70, or as soon as you possibly can?' Ms Brown said people should check their super was performing as expected, and that they were not overpaying on fees. 'You have got to plan for the future,' she said. Tribeca Financial chief executive Ryan Watson agreed people should have an idea of what their final retirement super balance will be. 'This provides people with a financial goal with which to aim and can enable them to make adjustments if they look like they may end up with insufficient funds to provide for their retirement,' he said. Tips to grow your nest egg Mr Watson's top tips to help super savers build a big balance include: • Review your account now by checking fees, investment performance and insurance benefits, which can significantly impact your final balance. • Make extra contributions to super, such as salary sacrificing. • Seek strategic financial advice. • Take a more active interest in your superannuation. 'Knowledge is power, and will dramatically increase a final retirement superannuation balance,' he said. Super guarantee boost Mr Watson said the super guarantee's recent increase to 12 per cent would provide a significant improvement to the final retirement balance of young Australians. 'At 12 per cent, this equates to a 33 per cent increase from where SG superannuation has traditionally been at (9 per cent). As such, it is likely that more Australians in 20 to 30 years' time will be retiring a lot more comfortably.' ASFA recently calculated that the 12 per cent super guarantee meant a 30-year-old today earning a median wage of $75,000 until retiring at 67 should be able to accumulate $610,000 in super, more than the necessary $595,000, a figure which factors in average inflation. Ms Delahunty said this was a major milestone and showed the strength of the super system benefiting from the right level of regular contributions and strong investment returns compounding over time. 'It's showing that it is really delivering for people in retirement and delivering savings to the public purse as a result,' she said. 'You will see a government that can make different decisions about public services as they will not be spending as much on the pension, especially when you compare it to other OECD countries. 'You can actually sit in this country today and imagine life as a retiree that is the same standard that you have in your working life. That's what we should be able to do as a prosperous nation.' Ms Delahunty said Australians were engaging with their super more because they wanted to know how they were going to live in retirement. Super funds can help with projections, education and tools, she said. 'The other really good education tool that people have available to them is ASIC's Moneysmart website. ASIC does a really good job of simply explaining some of the concepts. 'It's a good idea to have an understanding of how that nest egg can grow.' Read related topics: Need to know Wealth Anthony Keane Personal finance writer Anthony Keane writes about personal finance for News Corp Australia mastheads, focusing on investment, superannuation, retirement, debt, saving and consumer advice. He has been a personal finance and business writer or editor for more than 20 years, and also received a Graduate Diploma in Financial Planning.
Yahoo
11-07-2025
- Business
- Yahoo
Retirement Planning: The Main Mistake People Are Making That Could Leave Them Broke
Planning for retirement requires wise savings and investment choices so you'll have enough money to sustain yourself comfortably after you leave the workforce. The ultimate goal is to create a nest egg substantial enough to provide financial security for the rest of your life. But therein lies the problem — how long will that be? Up Next: Try This: Underestimating the length of your retirement can leave you struggling to make ends meet in your later years. Keep reading to learn more information about this critical error, what you can do today to avoid it, and how to prepare for a worry-free, sustainable retirement. The fundamental goal of saving for retirement is to secure an income stream you can rely on from the moment you stop working until, well, the end of your life. But accurately guessing how long you'll need your savings to last can be a lot more difficult than you may at first think. What's more, CNBC conducted a survey in late 2024 that revealed a lot of people aren't planning for a lengthy retirement. Only 64% of people planning for retirement say they think they'll need to save for 20 years or less, while only 16% are preparing for a retirement of over 30 years. Be Aware: There's some serious risk in underestimating the length of time you'll be around after you stop working. One major pitfall is assuming you'll be able to work until you decide to retire. While this may have once been the case, present-day reality suggests it may not be that simple. Older workers have to face the fact that their employers may choose to replace them with younger, more affordable workers. There are also the realities of aging to contend with. As we get older, unexpected health issues can necessitate early retirement, which can seriously complicate financial plans made with a longer working life in mind. If there's a silver lining, it may be that medical advances and improvements in senior healthcare can dramatically extend your life expectancy. The downside here is that this makes it nearly impossible to rely on statistical averages. In the worst-case scenario, you'll run out of funds at some point during your retirement, which means dealing with drastic and uncomfortable lifestyle changes, going into debt or even struggling to afford the essential medical care you may need. A good way to increase the odds that your retirement savings will last as long as you do is to plan for a longer lifespan. Instead of aiming for an average life expectancy of 77.5 years, plan on living to be 100. Though you'll have to save more in the meantime, it's better to have it and not need it than to need it and not have it. You'll also want to take a strategic approach to withdrawing from your retirement savings. Instead of withdrawing an arbitrary amount every year during retirement, consider inflation and how your investments may have performed during the prior year. Then use that information to adjust the amount you withdraw every year. Adopting a more flexible and responsive approach to managing your retirement funds is also a good idea. In years with market downturns or underperforming investments, withdraw less than you ordinarily would to avoid depleting your portfolio, which could have a significant impact on your ability to recoup losses in subsequent years. As with any investment, diversification is key. Make a plan for retirement income that can supplement savings and Social Security benefits. While this can be part-time work, receiving rental income from investment properties or investing in stocks that pay dividends and annuities will leave you with more time to enjoy your golden years. Whatever your approach, consider every outcome carefully and take the necessary steps to protect your peace of mind so you can enjoy the freedom of retirement without having to worry about how you'll cover essential expenses. More From GOBankingRates How Much Money Is Needed To Be Considered Middle Class in Your State? This article originally appeared on Retirement Planning: The Main Mistake People Are Making That Could Leave Them Broke
Yahoo
25-06-2025
- Business
- Yahoo
Top 5 Reasons Why Workers Have More Panic Attacks Than Retirement Plans
Unless you invested in property in the 1980s like some sort of young real estate prodigy, you may have some reservations — or even fears — about retirement. Getting bombarded with financial advice about saving more and investing wiser, all while you have your pockets turned inside out to see if you have enough for a sandwich, doesn't help bolster confidence in your future either. Find Out: Try This: If you're considering putting off retirement, for practicality or necessity, you're far from the only one. Various reports show that roughly 80% of American workers have considered delaying retirement for financial reasons, and the majority is more scared of going broke in retirement than they are of death. That's pretty grim. So why exactly are so many workers afraid to retire? Here are the top five reasons workers today are downright panicked about the prospect of retiring. The rising cost of long-term care, or healthcare in general, can leave many people shaking in their boots about whether or not their nest egg will cover medical expenses. (Although, they should really stop shaking as they could twist an ankle, and that's just another deductible they'll have to meet.) Even if you have a lot of money stored away, it's hard to determine if it will cover you for the rest of your life, and how long that will be. So many people are afraid to retire simply because of how much their healthcare will cost. According to Fidelity, the average 65-year-old couple will spend $12,200 during just their first year of retirement. With figures like that, medical costs alone could wipe out their savings within years — maybe even less. Be Aware: Unfortunately, investment strategy is not taught in schools as often as square dancing or how to play 'Hot Cross Buns' on the recorder. This leaves many folks with a lack of financial literacy, and all alone to figure out important life stuff like saving for retirement. When you don't have a ton to invest in the first place, it's tough to essentially gamble on funds that don't turn out to be lucrative, which leaves many to fear they'll make one bad investment decision and lose all their money. For many of you approaching retirement age, the thought of never seeing your workplace again is a dream scenario. However, if you are no longer interacting with your friends and coworkers regularly, you might feel like you've lost connection with the outside world. This can cause a feeling of disconnect so severe that you would even miss when Ted told terrible dad jokes or Gail would warm up her seafood leftovers in the break room. Truly, it can be hard to look forward to retirement when you are lucky enough to enjoy your coworkers and the conversations you have with them. Even Ted and Gail somehow keep you grounded. Many people derive a sense of purpose from their work and their routine. With retirement, the life associated with working is suddenly taken away. Who are you if you can't give your business card to someone that has the answers to that question? Many American workers feel like they don't have a lot of hobbies or friendships outside of work, and will struggle to find that same sense of purpose they found when they were working. However, traveling for fun and relaxing for free could be your new lifestyle choice, and that doesn't sound so bad. And now, the number one reason why workers have more panic attacks than retirement plans is … they won't be able to live their best life on the retirement budget they were able to scrounge together. Or, as Victoria Ratliff on 'The White Lotus' put it: 'I just don't think at this age, I'm meant to live an uncomfortable life.' Most likely, your income will drop in retirement, which is scary when you've become accustomed to a certain lifestyle. Outside of caviar wishes and champagne dreams, having to adjust to a way of living that doesn't afford you the same luxuries that you're used to can be very jarring, especially later in life. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 How Much Money Is Needed To Be Considered Middle Class in Your State? 4 Housing Markets That Have Plummeted in Value Over the Past 5 Years This article originally appeared on Top 5 Reasons Why Workers Have More Panic Attacks Than Retirement Plans Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
ABC News
31-05-2025
- Business
- ABC News
The Good Retirement: Living the high life on a low budget
Retirement can be a tricky time when we wonder, "Have I got enough money to live happily ever after?" But come retirement time, many Australians find their nest egg isn't big enough to go luxury cruising or laze on a tropical island. So how can you find enjoyment and fulfilment from retirement without spending a fortune? Guests:
