How much super is really enough for retirement? This always seems to be a hot topic. There are lots of different sources that talk about the magic number that you have to have in your super account when you retire, and the regular income you’ll need to help your savings go the distance.

Probably the most important thing that determines how much you’ll need for retirement is…well…you! How much you need will really depend on what sort of things you’ll need, or want, to spend your money on when you start living off your super.

There are a couple of ‘rules of thumb’ or tools that might help you start thinking about what sort of number is right for you:

• Two-thirds of salary principle: Aiming to have enough super to provide you with an annual retirement income equal to about 60-70% of your current gross salary (or what you think your salary might be near retirement) in retirement is often considered to be about what you’d need to continue a similar standard of living in retirement.

• Do the budget: If you’ve got a pretty good idea of what your expenses will be like in retirement, that gives you a pretty good indication of what sort of annual income you’ll need to be receiving.

• Take a tip from the experts: If you don’t really know what your expenses will be like in retirement, the Association of Superannuation Funds of Australia (ASFA) researches a budget for singles and couples to base their retirement living costs on. The ASFA Retirement Standard includes a budget for a ‘comfortable’ retirement, which allows for private health insurance, a reasonable car, a regular domestic holiday and the occasional overseas trip, in addition to general living expenses. The ‘modest’ retirement is defined as having more than the Age Pension but still only being able to afford fairly basic activities.
  

Once you know what level of annual income you’re likely to need in retirement, the next step is seeing if your current super position is on track to get you there.

How much will you have when you retire?

While we’d all love to have a crystal ball tell us exactly how much money we’ll have in retirement, it’s not going to happen.

You can, however, use some simple tools and calculators as a starting point to get an estimate or indication of how much retirement income your super might provide for you at retirement, based on where it’s at now. Here are a few calculators you might want to try:

• Superannuation calculator (MoneySmart)

• Retirement calculator (CommBank)

• Retirement tracker (Association of Superannuation Funds of Australia)

Calculators are a useful way to look at different scenarios, tweak some settings and learn what may and may not work for you, but they won’t provide you with an exact answer based on your personal circumstances. It's always a good idea to consider seeking professional advice before finalising any decision that might have an effect on your financial future.

Want to aim for a different outcome?

One of the most important things to remember is that, even if your ‘will need’ and ‘will have’ figures aren’t quite matching up at the moment, there are always options to try to improve your outcomes.

There are a few factors that can influence your potential retirement outcomes:

• You can top up your super with extra contributions on top of what your employer pays.
• You can change the age at which you retire – meaning your super is potentially accumulating for longer
• You can adjust the level of income you might need in retirement.

And if you earn more, your employer would be contributing more to your super (but that might not always be something you can control!)

Changing the dial on one or more of these factors is likely to have a flow-on effect on the others, which means that even if you can’t or don’t want to change one of them, changing another might still get you to a similar outcome.