Superannuation, also known as Super, is a fixed amount of money that employers are legally bound to keep aside on behalf of their employees. The employees themselves can add onto this by depositing money in their Super account. This money is kept safe until retirement after which the employee can utilise the money. This form of saving money is an excellent practice and is often recommended by financial advisors as this ensures a long-term investment is made where the benefits can be obtained in the future.
Life after Retirement
We all plan and imagine how our lives would change after retirement. Whether you plan to travel the world or stay back with your family and spend time with you loved ones, the most important question that comes in mind when thinking about retirement and the mode of life after is how much money would I need to fulfil all my basic needs and necessities?
Money is an integral part of every individual’s life without which there seems to be a dead end. The lifestyle of every individual is different which means not everyone requires the same amount of money to carry out his daily ordeals after retirement. However, despite the differences there is a standard midway, which must be considered while deciding how much money is required in your super account after you retire.
Being aware about the concept of Super and its significant advantages, we realise how important super is for employees after retirement. This article divides the discussion into two aspects; how much super do I need as a single person and/or as a couple?
The Association of Superannuation Funds of Australia (ASFA) declared an estimate of around $640,000 for couples and $545,000 for singles. The ‘singles’ and ‘couples’ can be further categorised as having a modest lifestyle and having a comfortable lifestyle. If you are single, who has aimed for a modest lifestyle after retirement, an estimated amount of $24,500 is sufficient for you to fulfil your needs. However, in case you want a comfortable lifestyle, your account must have $44,000 to cater for the additional needs and desires.
As for the couples, the same rule applies. Couples who wish to live a modest life after retirement need $35,000 in hand whereas couples who are looking for a comfortable lifestyle must have $60,000 with them.
It is to be noted how these figures change over time according to the inflation rate therefore it is essential for everyone to check the updated figures after every six months. ASFA sets out these figures keeping in mind and assuming that the partial age pension is also going to be granted to the employee.
The aim of the Super savings account is to ensure a smooth hassle free life is spent after retirement without having to think constantly about paying your bills and being on a budget. An ideal super account must have sufficient amount of money to cater for 25 years after retirement.