With the cost-of-living crisis reaching its peak, Aussies who are thinking about retirement may find themselves with less money saved up than they’d hoped.
In fact, some Aussies will find they now need to be mortgage-free with $1 million in the bank to be able to afford to retire comfortably, according to new research from Super Consumers Australia.
“Our retirement targets provide home-owning Australians with a ‘rule of thumb’ for what is needed to maintain living standards in retirement,” Super Consumers Australia director Xavier O’Halloran said.
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“The new figures show the need for higher savings for most Australians, reflecting the cost-of-living pressure people are currently facing. Thankfully, it is not all bad news, as [the] Age Pension increases and positive super fund returns have been working to offset the impact of inflation.”
O’Halloran said it was almost inevitable most Aussies would need to access the Age Pension at some point in retirement.
But it’s not all bad news, with O’Halloran saying the super system is working hard to help Aussies deal with the rising cost of living.
“The savings targets are about 3 to 8 per cent higher than last year. People with their super in a typical balanced fund would have seen their balances grow by about 9 per cent over the same time period, helping to cover the cost-of-living increases,” he said.
“This means people might be closer than they think to their retirement savings goals.”
So, how much do you need to retire?
For pre-retirees (aged 55-59), you would need to have anywhere between $91,000 and $777,000 for a single person with no mortgage, and $116,000 to $1,037,000 for a couple without a mortgage.
For current retirees (aged 65-69) you’d need between $76,000 and $795,000 for a single person without a mortgage, and between $95,000 and $1,055,000 for a couple without a mortgage.