How Much Money Do You Really Need In Retirement?

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How Much Money Do You Really Need In Retirement?

Have you ever sat down and actually figured out the amount of money you’d need to start putting away now to be set up for retirement? If not, it’s a good exercise to do, no matter what age you are now.

But let’s say, theoretically, that you have 20 years left until you want or need to retire, and your only strategy is to put your money into either savings or superannuation. How much of your current income do you need to put away each year for the next 20 years to stay on the same income during retirement?

The answer is 42%. It’s a lot, right? But some people are doing this. Often, they’re couples whose kids have left home and they’ve realised that they’re running out of time to take care of their finances. So, one member of the couple saves their entire income, while living off the other person’s income.

Money is not the only answer, but it makes a difference.

You see, the old age pension for a single person, at the moment is $888. Couples, if you split the total allowance in half, get even less. It’s not enough to be relying on the pension.

If you feel like there might be a better way than saving 42% of the money you have coming in for the next two decades, you’re right. Saving your money or putting extra into Superannuation is far less effective than investing in property, of course.

With property, you can maximise the value of your investment with leverage to get more assets growing at a faster rate. So, this time in 20 years, you can hopefully be retiring on a fair bit more than your current income!

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