How much Super is enough?

Brisbane Business Accountant - Senior couple on beach indicating Super savings

By Ian Chester-Master

How much Super you’ll need to enjoy your retirement is one of the burning questions for a lot of people.

Unfortunately, in many cases, people leave it too late, when there’s not enough time for them to build their desired retirement amount.

So, how much do you need to contribute to Super?

Super Savings Example

This chart shows how much of your wage you need to contribute to retire on 75% of your wage (assumes no existing Super balance).

Super contributions table

You’ll notice that the current Superannuation Guarantee Charge (SGC) rate of 9.25% – and the proposed top rate in years to come of 12% – don’t even figure in the above chart (unless perhaps you are less than 20 years of age).

Let’s look at an example of someone just relying on the SGC contributions to fund their retirement.

Jolene is 40 years old and has $100,000 balance in her Super account. She intends to work until age 67 (the current age she can potentially access the age pension) and wants her Super to give her a retirement income through to age 90.

As per the results and parameters in ASIC’s retirement calculator, Jolene will only be able to draw $12,134 each year, hence Jolene will have to rely on the age pension to supplement her retirement income.

Based on the current rate of age pension, Jolene would receive a combined income of just $32,445 each year.

You need to also consider – what will the age pension look like in 27 years? Will there still be an age pension in 27 years?

Remember, the only person who can take care of the older person you will someday be is the younger person you are now!

Contact us today to arrange a consultation time and we can work out how much Super you will need to allow you to retire in style. We will also show how you can achieve your goals.