I reckon it’s easier to start backwards, don’t you?
We can then work out whether our superannuation savings are on the right track.
Singletons need $595,000 in superannuation savings by age 67 to reach a comfortable retirement. Couples need $690,000.
These amounts hinge on us owning our own home, receiving a part pension, and our superannuation balance being drawn down and invested with a 6% annual return.
AFSA defines a “comfortable” retirement as being able to cover the basics and private health insurance, fitness and leisure activities, the occasional restaurant meal, an annual domestic holiday, and an overseas holiday every seven years.
Fair dinkum, AFSA estimates that this costs $51,814 per year for singles and $73,031 for couples.
Are your superannuation funds on track for your age group?
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Let’s tackle superannuation first.
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If you were born between 1958 and 2003, you can use this calculator to find out what your superannuation balance should be today to have a cushy retirement as per the ASFA reckoning.
Here are some examples.
If your superannuation balance is in line with what the Super Guru calculator says, you’re on the right track to reach the target of around $595,000 by the time you’re 67, which should give you a sizeable part pension in retirement and help you live comfortably.
Now, let’s chat about the eligibility criteria for a part-pension or full-age pension.
Are you entitled to the Australian age pension?
For individuals born on or after 1 January 1957, the retirement age will be 67 years.
Written tests and assessments set down by the government.
If you’re looking at the assets test for the full age pension, as a solo homeowners, you’re not allowed to have assets worth more than $314,000 outside your home. If you don’t own a home, the cap is $566,000 in assets.
For a part-pension, the cut-off point for a solo homeowner is assets of $695,500, and for someone who doesn’t own a home, it is $947,500.
To receive the full age pension, couples who own a home can’t have more than $470,000 in assets outside of their house. Couples who rent can’t have more than $722,000 in assets.
For a part-pension, the cut-off for couple home owners is assets of one million forty-five thousand five hundred dollars, and for non-home owners, it is one million two hundred ninety-seven thousand five hundred dollars.
In terms of income, single pensioners can earn $212 per fortnight, and couples can earn $372 combined per fortnight, and they’ll still qualify for the full pension.
For a part pension, the eligibility threshold for single pensioners is an income of $2,500.80 a fortnight, and for couples, it’s $3,822.40 a fortnight.
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This article contains general investment advice only (under AFSL 400691). Authorised by Emma Reeves.
