How Much Money Do I Need To Retire?

“How much money do I need to retire?” is one of the top five questions asked about retirement. When I asked my Financial Planner that question, he replied, “It is the same as asking how long is a piece of string”. It seems there is no correct answer, mostly because we do not know how long we will live.

Life expectancy has increased over the last few decades due to advances in medicine.  Hong Kong currently has the highest life expectancy at 85.29 years. Worldwidemeters website also tells us women on average live longer than men. This is due mostly to biological factors. Hence, women with retirement in mind, need to save more than men.

In reality it is more likely a woman retires with less retirement savings than a man. A woman’s earning capacity can be interrupted by pregnancy or caring for children or aged parents.

Wealth creation companies are likely to keep promoting the need to keep saving for that illusive ‘comfortable retirement’. For over 60% of the Australian population this creates a sense of anxiety and stress about not having enough Superannuation for retirement. In Australia the ASFA has calculated a single person aged 65 years will need $545,000, and couples $640,000 in savings to enjoy their retirement. It does make a significant difference if you own your own home and be partially supported by an aged pension to have a comfortable retirement income.

An independent research organisation, The Grattan Institute, recently demonstrated the numbers do not need to be that high. Within the provisions of owning your own home and having the support of a partial Aged pension, couples need $200,00 and a single person $150,000 in retirement savings.

But life’s best laid plans can often go astray. Early retirement happens mostly when unexpected health issues prevent us from continuing to work. Other surprises, like divorce in later life can create the necessity to rebuild finances.

You are an intelligent, capable person so ask that question, “How much money will I need to retire?” Don’t be afraid to commence the conversation. Ask it of people you trust. Engage professionals to reduce the anxiety of not knowing or educate yourself to become aware of the basic resources needed for a successful retirement.

Let me know what you think.

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About Estelle Kelly

Estelle Kelly ACC is an Associate Certified Coach member of the International Coach Federation. Estelle has over twenty years of experience in the education and welfare sectors, and specialises in coaching her clients towards a happy and successful retirement.