How much do you REALLY need to retire?
Let me tell you about the worst speech I’ve ever given in my life.
It happened five years ago when a friend asked if I’d speak about retirement at a lunch for his men’s group.
“They’re lots of fun”, he said with a smile.
As I drove up to the gates, I realised this was no ordinary bunch of blokes: it was an exclusive private club in a wealthy suburb of Melbourne.
Specifically, two hundred slightly sozzled old guys.
I started on safe ground, talking about the state of the sharemarket.
Then I let one slip through to the keeper, explaining my Donald Bradman Strategy:
“If you own your own home, get the aged pension, and you’re willing to do a bit of paid work, you could comfortably retire on as little as $250,000”, I said matter-of-factly.
Talk about leg before wicket …
“BULLDUST!” yelled one angry multi-millionaire.
“That’s less than I paid for my yacht!” blasted another.
The crowd erupted, and basically bounced me off stage.
Howzat?!
Clearly I’d hit a nerve. After all, the number one question every pre-retiree wants to know is this:
“How much do I need in super to retire on?”
And until now there’s only been one number that everybody quotes: the Association of Superannuation Funds of Australia (ASFA) standard: $545,000 for a single and $640,000 for a couple to have a comfortable retirement.
There are two problems with this.
First, it’s out of reach for most people: the ABS says that the median super balance on retirement is $250,000 for men and $200,000 for women. So for an average working Aussie, why bother trying?
Second, the people who calculate the ASFA figure are … the super fund lobby. It’s a bit like asking old Dr Kellogg, “What’s the most important meal of the day?” (Breakfast, of course!)
Yet for years theirs was the only retirement figure available.
Until now.
A group called Super Consumers Australia (a partner of CHOICE) has done the research and come up with their own figures — and given me a sneak peek.
Not only are their figures much more attainable, they’re based on ABS research on what Aussie retirees actually spend.
So what’s their number for a comfortable retirement in these inflation-stressed times?
The newest figures are $302,000 for a single and $402,000 for a couple in a middle-income household, again assuming they don’t pay rent or a mortgage.
(This is, admittedly, a little higher than my Don Bradman figure, but that’s mainly because I encourage retirees to keep working at least a day a fortnight to supplement their income.)
Either way, for far too long the super industry has played to the millionaires in the members’ stand. What these figures do is give the average Aussie a fighting chance at scoring 100 (not out!).
Tread Your Own Path!
https://www.superconsumers.com.au/retirement-targets