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insurance for retirement planning

How Much Money Do I Need to Retire?


Whether you’ve just started working or you’ve been with your company for over twenty years, you’ve heard about the importance of saving. Having an emergency fund set aside to take care of unexpected expenses helps you avoid taking on debt, which can leave you penniless. However, equally crucial is building your retirement savings, as you’ll need to sustain yourself when you’re no longer fit to work.

The great thing about building up your retirement fund is that it’s never too late to start. While it’s much more ideal to start saving as soon as your first paycheck, you can make a few adjustments with the help of a financial planner. Here’s what you need to know about saving enough money for retirement:

Determining How Much You Need

Before you get started, you’ll have to know how much you need to live on retirement. According to The Association of Superannuation Funds of Australia (ASFA), a couple seeking comfortable retirement needs around $58,128 a year in savings. Meanwhile, a couple that is amenable to a modest retirement needs to spend around $33,664 a year.

You’ll need to determine what you’ll need to survive once you retire. This amount depends on how long you live, what kind of lifestyle you want, and medical costs. You’ll have to figure out your timeline to retirement, which is the time between your current age and the age you’d like to retire. This timeline will significantly impact how much money you’ll contribute to your superannuation funds. 

Calculating The Cost

If you want to retire at 60, you generally need around 15 times the amount you calculate for your annual after-tax retirement costs. If you estimate approximately $40,000, then you will need $600,000. However, if you’d like to push your retirement age to 65, then you may only need around 13 times the amount. However, if you want to have a holiday home or leave some funds for your children, you’ll need to factor that cost into this estimate. 

Meanwhile, if you want to retire soon, a decent rough estimate is to have a retirement portfolio around 25 times your annual retirement income’s value. 

The Two-Thirds Rule

One helpful way to estimate how much money you need is to suppose that you need two-thirds of your income before you retire to live comfortably. Keep in mind that this estimate is best for high-income earners. 

According to ASFA, a single person needs around $430,000 to comfortably retire if you are also receiving a partial Age Pension. If you’re open to a modest lifestyle, it becomes $35,000. Remember that the earlier you save, the more money you’ll enjoy when you’re retired. 

The 4 Per Cent Rule

Another common technique in projecting your retirement and income is the 4 per cent rule. In this rule, you withdraw 4 per cent of your total retirement portfolio in your first year and then increase the amount according to the inflation rate in the following year. 

The Market-Based Approach

In this approach, you’ll base your retirement withdrawal rate on both the total portfolio’s stock market risk level and the overall market valuations. It’s a little more complicated, but it offers a higher withdrawal rate. If you have a moderate to risk appetite, you can start at around 4.4 per cent and go as high as 5.7. If you’re conservative, the rate usually starts at 3.9 per cent and goes up to 5 per cent.

The Custom Approach

This personalised approach emphasises your personal goals and objectives. It also considers your investment risk tolerance, your income timing and expenses, and current market valuations. If you’d prefer more flexibility in building your retirement savings, this approach may be best for you. It also accounts for the individual needs and specifications of Australians, making it a more desirable way to save money for retirement.


Handling your finances and preparing for retirement can be tricky, especially when you try to figure it out by yourself. A financial consultant is essential for making informed investment decisions, especially when you’re planning for your future. With their help, you’ll be on track to saving up for the comfortable retirement you deserve.

If you need assistance with insurance for retirement planning, Jubilee Financial’s services are one of the best in Australia. We work with individuals of various backgrounds to help them reach their financial and life goals whether short or long term. With over 15 years of experience, we have the skills and expertise to prepare bespoke plans that meet your specific needs. Contact us today to see how we can help.

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