How Much Do I Need for Retirement?

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It is never too early to begin thinking about retirement. The younger you are when you start setting aside extra amounts, the better it adds up at retirement time. It might be a mistake to depend on basic age pension amounts to get by. The increases are infrequent in the amounts, yet the cost of living increases every year. Make a lifestyle goal and find out what it will take financially to get you there. The earlier you start, the less you will have to set aside each month. Having an active, enjoyable retirement full of your favorite activities and travels begins with good planning.

Desired Lifestyle

Knowing how much money you need to place into your retirement fund accounts will depend on the lifestyle you want to enjoy. There are also other considerations like the retirement age you are planning on and whether you’ll be getting the basic age pension. The basic amounts for both single and couples will allow you to get by, but there is no level of comfort to it. It is by every definition a basic supply of money for bills and necessities. Adding more money to your super or having private investment is the only way to increase your retirement plan amounts.

Retirement Age

Age 65 for men and 64.5 for women is the current retirement age. There will be an increase to 65 for women soon. This is the soonest that you can access your age pension. The important thing to note is that if you plan to retire before age 65, then you will have to add lump sums to the super, or some other form of retirement savings plan in order to maintain the lifestyle level of your choice. Not having or qualifying for the age pension will also make a big difference on the amount of money you will have to set aside yourself.

Adding to the Super

March of 2013, saw the amounts of roughly $21,000 and $31,000 set for a single and couples age pension amounts. This is for a basic retirement fund amount. As you can see, adding to your super is a good idea, no matter how small the contribution is. The more you intend to upgrade your lifestyle, the more you will need to add to savings somewhere. Saving an additional million dollars over a 40 year period in addition to your basic super will take you into the comfortable lifestyle arena.

Multiple Income Streams

There is no getting away from having to put extra money aside, unless you feel you can reasonably live on the basic age pension. The higher the expectations you have on monthly income after retirement, the more aggressive and risky your retirement investments will have to be. Trying a variety of investment savings strategies is the wisest thing to do. Don’t place all of your risk in one direction. It may require that you have to keep working part time for a while right after retirement. There are numerous ways to get the monthly income you need.

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This article was written by Richard from Pensioner Loans Assistance, a personal finance blog which helps seniors obtain affordable loans and credit options through government programs and non-profits. They also provide information on getting out of debt, budgeting, saving and stretching each hard earned dollar.