According to the retirement standard set by the Association of Superannuation Funds of Australia (ASFA), the amount of money required for a ‘comfortable retirement’ is $60,042 a year for couples and $42,953 for singles.
Statistics from the Melbourne Institute that 53 per cent of couples and 22 per cent of single people are on track for a comfortable retirement, meaning a substantial portion of the population will have a moderate or limited budget in retirement.
According to Boutique Advisers’ Katie McDonald, some basic maths in the formative stages of a budget helps the bulk of her clients get on track.
“Now is the time to act and work out your magic number; in simple terms look at what your income is now, subtract your main debt and what’s left is the magic number you’ll need to maintain your current lifestyle,” she said.
“It’s not as difficult to achieve as many people think and there are some great new government initiatives out there to help you catch-up and boost your super fund.”
This budgeting tool doesn’t just apply to those in the accumulation stage of wealth. Where an investor has a few decent working years left, it’s not too late to turn around their future finances, even in their 50s.
“In fact, your 50s is a great time to boost your retirement nest egg as you’re often at your peak earning capacity and added expenses like childcare fees will have eased,” Ms McDonald said.