Putting a price on retirement: How much money do you need?

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Working out how much money you will need for retirement isn’t easy. There are a number of factors that need to be taken into account, such as what age you retire and how long you live, what kind of lifestyle you want in your retirement, and your health. To work out how much money you will need in your retirement, consider the following factors.

Age of Retirement

The age you retire will have a huge effect on how much money you will need during your retirement. If you retire early, you will need more money so your retirement fund lasts longer. If you retire later, you usually wouldn’t need as much.

You also have to take into account how long you will live. This is the tricky part – no one has a crystal ball after all. Bear in mind women usually live longer than men, while people with no history of medical problems, who stay healthy and active will usually live a longer life. You can use the Suncorp superannuation calculator to find out how much you will need to retire.

Couple or Single?

The amount you need for retirement will depend on your partner status. Individuals have to cover all costs themselves, so they usually need more to be independent. Couples can share living costs, which means they don’t need to save quite as much individually.

Standard of Living

How you plan to live during your retirement will also have an effect on the amount you will need to save. If you plan on living modestly, then the amount you need will be lower. However, if you plan to travel, to keep a nice car, to attend a number of activities, and to maintain your current standard of living, you will need much more in your retirement fund.

Your Health

Depending on where you retire, you may have to take into account medical bills. An unfortunate side effect of aging is that your body can deteriorate. This may mean getting glasses, increased doctor visits, seeing a specialist, or even getting a hip or knee replacement. You will need to make sure your retirement fund can cover these eventualities, or the cost of private healthcare.

Retirement Location

Fancy retiring somewhere warm and exotic? Many retirees do. There are retirement communities all over the world, and some benefit from having a lower cost of living than the retiree’s home country. Choosing to retire in a foreign country can be a great way of stretching retirement funds, but be sure to take all aspects of relocating into account.

Putting a Price on it

Once you have taken all these considerations into account, you should be able to come up with a rough figure. The amount required for retirement will depend on your location, so check out government-run or other authoritative websites that can tell you how much you will need for retiring in your geographical location.

These sites will often have handy calculators to help you work out how much you will need, and they may give industry standards for how much you need. If you want to make the most of your retirement, be sure to make the right choice with your retirement fund. Compare your options today.