This is the $64,000 question, although many financial houses will tell you it should probably be the $640,000 question. Most people should aim to have enough money in retirement to generate an annual income of about 60-70 per cent of their final salary. But this is not always possible, particularly when you think that you might spend as many years in retirement as you have in the workforce. That's a long time to provide for. It might suit your purposes to draw down more money in the early years of retirement when you want to travel and are still active and later, when your lifestyle slows down, rely on a lower income and maybe some government assistance.
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Only about one-third of Australians are actually saving enough to meet their retirement goals. If you are relying purely on an age pension to fund your retirement years, get ready to take a big pay cut. Government pensions are designed to replace only a minority proportion of your working income. |
