Retiring plan with less than $100k

LOW-spending working Aussies would only need to have saved $88,000 by retirement, according to an independent consumer advocacy group.

Super Consumers Australia, a partner of Choice, says its new targets provide a solid “rule of thumb” for what’s needed to maintain living standards upon retirement.

Low-spending solo preretirees aged 55-59 would only need to have $88,000 saved by the time they reach 65, on top of income from the age pension. This assumed they would spend $1308 a fortnight or $34,000 a year.

Medium spenders who shelled out $1692 a fortnight, or $44,000 a year, would need $301,000. Meanwhile high spenders who splashed $2115 a fortnight, or $55,000 a year, would need $745,000.

The targets were based on ABS data on retiree spending and assumed retirees owned their home outright and were not paying rent or a mortgage.

Super Consumers Australia director Xavier O’Halloran said the targets were less than those set by the Association of Superannuation Funds of Australia, which were “too high” for the average Australian.

He said they included a buffer to provide confidence people’s savings could withstand the type of market volatility we were now undergoing.

“Having credible targets, based on actual spending, means people can confidently spend and get on with enjoying their retirement,” Mr O’Halloran said.

Pre-retiree couples who spent low, forking out $1846 a fortnight, or $48,000 a year, would need $111,000, according to the targets.

Medium spenders going through $2462 a fortnight, or $64,000 a year, would need $402,000. High-spending couples splurging $3115 a fortnight, or $88,000 a year, would need $1.03m.

When it comes to current retirees, aged 65 to 69, who spent a low $29,000 a year ($1115 a fortnight), they’d need $73,000 in super, on top of the aged pension income.

Low spending couples who shelled out $42,000 a year ($1615 a week) would need $95,000.