How Much Money Does It Take to Retire Comfortably?
The sooner you start thinking about retirement, the better: it’s a truth that many people have had drummed into them since their first days on the job. Just as important as starting to save as early as possible, however, is how much you save toward retirement.
How much money do you really need to retire and live comfortably during your senior years?
The Cost of Living Comfortably in Retirement
If you plan to live a comfortable lifestyle during your retirement years, it’s important to start with a decent estimate. For example, if you assume that you will retire at the age of 65 and live to an average of 85, you’ll need to provide for at least 20 years of living expenses.
It’s estimated that in order for a couple to live a comfortable lifestyle through retirement, as long as their house is paid off, they’ll need approximately $60,000 income per year. For single seniors, it could be possible to get by on around $27,000 a year.
ASFA estimates the lump sum needed to support a comfortable lifestyle for a couple is $640,000 (or $545,000 for a single person) – assuming you’re eligible to receive a partial Age Pension.
Breaking Down Your Costs for Retirement
It’s important to also consider how your personal costs will add up.
The estimates above include common expenses: food, lodging, energy, clothing, transportation, and recreation, however if you have other expenses, you may find that your costs increase. Make sure you also consider:
- Anticipated extra travel expenses if you live far from family
- Any outstanding debt
- Increased funds for medical expenses if you have serious health concerns.
Ready to get started saving for retirement in a way that can work for you? Contact us today to learn how we can help.
