Home Superannuation How Do I Know If I Have Enough Superannuation?

How Do I Know If I Have Enough Superannuation?

written by Shelley Marsh 04/12/2014
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I don’t know about you, but for me time is just flying by.  Even more so since we had our daughter.  Time seems to have gone into hyper-drive!!!  What is that???  One minute I was 27 years old, footloose and fancy free roaming the globe.  The next minute I am 41, married, with a mortgage and a four year old, hearing the word “Muuuuuummmmm” several million times a day.  A completely different life.  But somehow the years in between seemed to have just whizzed by.

And from what my mum tells me, time goes by even faster from here on in – next stop 50, then 60!  What the??????  I was pretty sure that this was never going to happen to me!  I guess it is!  So I had better make sure I am financially prepared for my retirement.  Especially given – if the current legislation passes– I won’t be able to claim the age pension until I am 70!!  I am pretty sure I would like to retire before 70, so I need to make sure that I have enough superannuation to make that happen.  Otherwise it is the Newstart Allowance (or whatever they will call it by then, if it even exists) and cat food for me! Scary!

So how do I decide whether I have enough super?  It’s a tricky question as there are lots of factors involved; however, here are three options that might work for you.

(1) Run some calculations

First you need to take a good look at your current financial situation.  This includes listing all your assets: things like savings, shares, house, car/s and superannuation.  Then you need to list all your debts: things like your mortgage, credit card debts and personal loans.  Add up your assets and deduct your debts and you will have a fair idea of how much you’re worth now.

Next you need to think about how much income you will need to live on when you’re retired.  Here is a hint – the Association of Superannuation Funds of Australia (AFSA) Retirement Standard benchmarks says that a comfortable lifestyle for a couple can cost around $56,000 a year.   A modest lifestyle, AFSA says, costs about $33,000 a year per couple.  You might think you need more or less than this depending on your current and expected future lifestyle.

The last factor to think about is how long you might last!  Apparently retired men in Australia live to an average of 86 and a retired woman until 90!  This means if you retire at 65 your superannuation money has to last you on average 20-25 years!  That is quite a lot of time!

(2) Use a superannuation planning calculator

Superannuation calculators are quick and easy to use, and take into account a lot of factors around your individual circumstances. They are a fast way to get a grip on whether your superannuation is on track.  There are plenty around, the Money Smart website has one here.  I used the one on the CareSuper website.  To check it out click here.  I found it really useful and it took me less than 10 minutes to get an idea whether my superannuation was on track for the retirement lifestyle I want.

(3) Get some personal financial advice

A financial planner can help you determine whether your superannuation is on track to pay for your retirement. They will work with you to determine your current financial position, your goals, and your expected post-retirement lifestyle.  The financial planner’s advice will be tailored to you and your circumstances. If you are a member of some industry funds you can access some services of a financial planner for free. For example, CareSuper members get financial advice over the phone on a range of simple super-related topics as part of their membership, or members can see a financial planner at their offices for more complex advice where the first session is free. If you are a member of an industry fund and want some personal financial advice this might be a service that is worth looking into.

Figuring out whether your super is on track to fund your retirement is really important, especially given the pension age is definitely on the rise.  Nobody wants to find out that they have to work longer than expected to fund their retirement lifestyle, or worse that they can’t afford the retirement they would like. Your super is your money and one day you will need it, so look after it now and it will reward you later. So far my superannuation appears to be on track, so hopefully there will be no cat food in retirement for me!  However, things change and it is something I will have to keep on top of, as the years speed by!

This post is sponsored by CareSuper.

have received a fee from CareSuper to blog about super, however this post contains my own opinions. While I am not personally recommending CareSuper, information about superannuation can be obtained from their website caresuper.com.au and it’s always good to get your own advice about financial matters.

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8 comments

Renee Wilson 05/12/2014 at 6:48 am

Super is something that has always stressed me and I have often wondered if we will have enough to see us through. Thanks for this great advice, Shelley. Life is definitely going way too fast.

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Lydia C. Lee 05/12/2014 at 6:56 am

Great advice (tho made my stress levels soar). We will be hopefully doing something more concrete on it this year, promise!

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Raychael aka Mystery Case 05/12/2014 at 11:37 am

I have hardly any super. When I had time off after my three girls, we decided to put extra in to my husband’s as he is on a good Public Service one and it just made sense to put all our eggs in the one better basket. Now that I’m back earning money, I’m actually wishing that as a married couple we could have a joint account and keep our super money together. Hubby is on a much better plan and it would be better if I could add to that.

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Seana 05/12/2014 at 8:50 pm

I would really like to know exactly how much we should aim to save before retiring… actually I only want my husband to retire as when he does, I can work more, which I’d love to do. As we have 8 year old twins plus two teenagers, I don’t think retirement is imminent! But it would be great to have a figure in mind.

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Robyn 06/12/2014 at 10:58 am

Super just scares the bejesus out of me! I think I just need to visit someone who knows what they’re talking about and ask them to do it for me. I don’t even currently have one and have no idea where to even start!!

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Grace 08/12/2014 at 10:05 am

I’ve been very slack about my super. I really need to sort it all out and consolidate it all…I have no excuses other than sheer plain laziness…and you’ve even given me stacks of information about it!

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Lisa Wood 09/12/2014 at 12:30 pm

Super is so very confusing….and both hubby and I have too many funds which we are trying to combine into. We keep thinking about using our super for an investment place, must look into that next year.
Great tips – and yeah working t

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Lisa Wood 09/12/2014 at 12:30 pm

Ops – hit enter!!!!
Great tips – and yeah working till 70 does not sound fun!!!

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