How Much Do I Need In Retirement?

How Much Do I Need In Retirement?

Planning for retirement

Assuming that you are a couple planning for retirement at 65 and that you are also planning to live to 85, which is a ripe old age, that is unless you are already in you 80’s!

Regardless of your age, to fund your next 20 years of life as a couple you will need a lump sum of about $450,000 to generate a modest income, or $750,000 to generate a comfortable income. If this frightens you don’t worry! Because there are always solutions to money scarcity.

See the table below for generally accepted figures in Australian dollars. These figures assume that you own your own residence, or at least your accommodation is provided for in some way.

So if you can plan for your additional medical expenses, your intended lifestyle and departure date from this planet, then you are in a position to know what you need in a superannuation lump sum to cover your costs.

The sad truth is that most Baby Boomers currently heading for 65 have nowhere near the savings required to fund their retirement even in a modest style. So most of them will come cap in hand relying on welfare payments to get them by.

Couple Annual living costs Lump sum needed
Modest $33,000 $450,000
Comfortable $58,000 $750,000
Single Annual living costs Lump sum needed
Modest $23,000 $300,000
Comfortable $42,000 $550,000

Income, How Much Do I Need In Retirement?

Living costs for a couple can be seen as about $650/week (modest) $1100/week (comfy), so in general terms most of us will need to look at alternative ways to generate upwards of around about  $700/week, or $100 a day. Sounds pretty difficult to achieve doesn’t it? It’s not difficult but it will take a lot of work.

To get by some people will look at:

  • Downsizing the family home
  • Living in Vietnam or Thailand
  • Getting a job
  • Starting a business

Downsizing the family home

This is not necessarily a bad idea, in fact we are planning on downsizing and my wife and I both want to live overseas for a year or two. But I feel that the plan to downsize to generate cash for lifestyle is not a good solution. This is because I believe the value in your home is the backstop for your financial standing and this should be dipped into only as a last resort. Because if all else fails the money from your home can provide for you at the latter end of your life.

Getting a job

I’m not keen on getting a job with the restrictions of working hours and commuting, so I’ve started my own online business which works in well with my flexible lifestyle.

Starting a business

I’ve chosen to run my own online business, there are many reasons for my choice. But, running any sort of business can be hard work and it’s no different with an online business. Don’t let anyone tell you that they only spend a couple of hours a week, it simply could not be true. What is true though is that I may spend 40 hours working to revamp or get a project off the ground. Then when it’s up and running I may then spend about 2 hours a day on it.

It is true that I could leave things alone for a few weeks and it would not have any measurable affect on my income. The trouble is I really enjoy what I’m doing and often my wife has to drag me away from my computer to get on with our life. How much do I need in retirement? Well I know I need time, at least another 20 years.

Hey I’m 65 and I’m still young, ready to travel and have fun!

How to earn money in retirement

Take a look at a previous post of mine: How to earn money in retirement, because it may give you some ideas on how you can earn money for yourself.

For additional info on how you can make a living in retirement take a look at another post of mine: Affiliate Marketing For Beginners. This may help to clarify some of the the issues that I have spoken about in this short “How Much Do I Need In Retirement” post.

There’s lots of information on this site to help you get started with Affiliate Marketing. Please also take a look at my Wealthy Affiliate Review, or just go to my steps to success to discover how to affiliate market other peoples products and get the very best training for free.