Spinoff - how much super do you have and how much to retire?

[SleepyBear]

Spinoff on another thread as I didn't want to derail. If you are happy sharing, how much super do you have and how much do you think you need to retire? 

I am fortunate that super has been a mandatory contribution for my entire worklife as I'm early 30's with circa 100K in super (to be honest I haven't checked the balance in quite some time....) It really should be higher but I spent my late teens and early 20s tied up in a terrible fund thanks to a bad financial advisor that more was going in fees than it was growing each year. 

I expect as the official retirement age continues to rise that I need to grow this to atleast 500K but ideally closer to $1M to protect myself and self fund a retirement. 

Edit: Just checked and balance is actually ~$136K. 

Edited June 15, 2021 by TinyGiraffe
Balance update.

[Jerry]

I am in the lucky situation of defined benefit super - so I will never leave this employer.  

[SleepyBear]

2 minutes ago, Jerry said:

I am in the lucky situation of defined benefit super - so I will never leave this employer.  

Excuse my ignorance but what is a defined benefit fund? Is it like a fixed pension you are paid rather than a $ balance?

[dianalynch]

I have defined benefits super as well, and had 17 years (10 of them at a reasonably senior level) to grow it. It’s already a healthy balance, more than is needed for a single person to retire ‘comfortably’ . 

[Jerry]

1 minute ago, TinyGiraffe said:

Excuse my ignorance but what is a defined benefit fund? Is it like a fixed pension you are paid rather than a $ balance?

My defined benefit super is a multiple of my final salary.  The multiple rises each year of service.

So, for example, if my multiple is 10 at the time of retirement and my salary is $100000, then my super is $1 million.

[SleepyBear]

Right. That's great but can't image they exist anymore. 

[Moomintroll]

They only exist for people who have been with the same employer for a long time. 

I am late 50s, don't want to name any figures, but I am feeling confident of getting to what I consider a reasonable amount for a comfortable lifestyle within 5 years. The last few years I am really starting to get the benefit of growth compounding and raising the balance. In my early 30s I would have had less than you do now OP, maybe $60-70K when I took a few years out for babies in my mid thirties. 

[CrankyM]

Wow, I wish I had something like that...

Mine is not great. Almost 40 and last time I got something from them it was about 79K. However, I the amount our workplace has been paying into it has jumped (now 13.5%, though the new EBA is in negotiations for a higher figure), to the point I actually had more paid into it then DH on his measly 9%. (He is almost 50 and has 129K because his got wiped out significantly during the GFC with a shitty super fund). I'm happy with my super fund though. They have always seemed to do decently in terms of returns and the weathered the previous GFC and economic lows without really losing money. (It's unisuper for anyone wondering, you have to be working in the University sector to get into it or be a spouse of someone working in the sector).

ETA: I only work 0.6 and earn between 45-50k a year. That impacts on it.

Edited June 15, 2021 by CrankyM

[SleepyBear]

Absolutely respect those not comfortable naming balances but how much is a comfortable figure for retirement? 

[Moomintroll]

2 minutes ago, TinyGiraffe said:

Absolutely respect those not comfortable naming balances but how much is a comfortable figure for retirement? 

It of course depends on so many factors, that it's hard to say. Depends on your age at retirement, how long you think you might live for, what kind of lifestyle you want to live, whether your housing is paid off, how risk averse you are, whether you want to help out your kids etc etc.

I reckon somewhere between half a million and a million for someone with paid off housing. There are government guidelines too which you can use as an estimate. https://moneysmart.gov.au/grow-your-super/how-much-super-you-need

[Rosie28]

I’m late 30s and have $300k odd. We don’t intend to have to rely on it though, and have a number of other investments. 

[LemonMyrtle]

9 minutes ago, TinyGiraffe said:

Absolutely respect those not comfortable naming balances but how much is a comfortable figure for retirement? 

Well if you own your own home, then you can live off zero super, the pension is enough to live on. You won’t starve.

The barefoot investor says $250k is enough for a couple to be comfortable if they own their home, so eating out now and then and 1 holiday a year. That’s with a part pension
https://www.barefootinvestor.com/barefoot-steps/step-8-nail-your-retirement

Anything above that is a bonus, I guess? Makes you more comfortable.

 

DH and I have healthy super balances. More than average for people our ages. Even my balance is pretty good considering I took two years off and went part time. Super won’t be a huge issue.
Paying off our house will be the biggest hurdle, and making sure we have a home that isn’t falling down around us too, because major maintenance won’t be easy to afford when retired.  So to retire in the lifestyle we are used to we need to somehow do a knock down rebuild and pay it off completely. 

[LemonMyrtle]

8 minutes ago, Rosie28 said:

I’m late 30s and have $300k odd. We don’t intend to have to rely on it though, and have a number of other investments. 

Holy crap, that’s high for late 30s. Even DH doesn’t have that much and he has worked full time constantly in well paid jobs. And you have other investments as well?? How is that even possible?? 
 

(note: you don’t have to actually answer these questions, I’m just shocked) 

Edited June 15, 2021 by LemonMyrtle

[verucasalt]

A lot of my research states to aim for $1M and own your home.  There is maintenance, lifestyle and health costs that have to be factored in and these are large variables.  You need to co-contribute for a lot of surgeries as you age too (e.g. hip/knee replacements) no matter what level of private health insurance you have.  Medication can be really expensive.  I would not depend on the public health system.

I make pre tax super contributions, and if you can, I would encourage you do to the same.    

This might help you too:

https://moneysmart.gov.au/grow-your-super/super-contributions

I also invest in shares.

Edited June 15, 2021 by verucasalt

[Rosie28]

7 minutes ago, LemonMyrtle said:

Holy crap, that’s high for late 30s. Even DH doesn’t have that much and he has worked full time constantly in well paid jobs. And you have other investments as well?? How is that even possible?? 
 

(note: you don’t have to actually answer these questions, I’m just shocked) 

Without going into too much detail I’m in a high earning profession (and perhaps more importantly, a profession where graduates start on a very good salary in the top tier, so earning good money young), have always invested in the high risk fund, and have contributed along the way too. DH payed into my super when I was on mat  leave. He has less than me, around $150k, because he started off earning less and then started his own business etc.  

The other investments are shares, ETFs, a managed fund and the house. Mostly managed by living on my graduate salary for the first 10 years of my working life and saving or investing the rest. 

Edited June 15, 2021 by Rosie28

[dianalynch]

4 minutes ago, LemonMyrtle said:

Holy crap, that’s high for late 30s. Even DH doesn’t have that much and he has worked full time constantly in well paid jobs. And you have other investments as well?? How is that even possible?? 
 

(note: you don’t have to actually answer these questions, I’m just shocked) 

I’m similar, it was a senior role in the commonwealth public service with a defined benefit fund (that people can’t get anymore very unfair) with my employer paying 15.4% and topping that up myself. Quite a lot of luck, there was an economic boom pre gfc and more promotions and pay rises. Then the luck of good health that enabled me to work longish hours. Some hard work. And a bit of prudence that meant I socked extra away. 
 

but mostly luck of being born when I was. Young workers put on as casuals with a tight arse accumulations plan won’t see anything like this. It’s very unfair. 

[Gumbette]

14 minutes ago, Rosie28 said:

I’m late 30s and have $300k odd. We don’t intend to have to rely on it though, and have a number of other investments. 

That’s awesome!

Turning 50 with $300k, house is paid off and I should have $300-$400k to add to the balance once we downsize in the next few months. Downside is that’s all I have as I’ve drawn down all DH’s to pay off the mortgage.  Still feel lucky financially compared to a lot of women though.  The advertisement where the woman is renting a room above a pub because her husband has passed makes me sad and grateful that DH had insurance.

[verucasalt]

11 minutes ago, LemonMyrtle said:

Well if you own your own home, then you can live off zero super, the pension is enough to live on. You won’t starve.

The barefoot investor says $250k is enough for a couple to be comfortable if they own their home, so eating out now and then and 1 holiday a year. That’s with a part pension
https://www.barefootinvestor.com/barefoot-steps/step-8-nail-your-retirement

Anything above that is a bonus, I guess? Makes you more comfortable.

 

DH and I have healthy super balances. More than average for people our ages. Even my balance is pretty good considering I took two years off and went part time. Super won’t be a huge issue.
Paying off our house will be the biggest hurdle, and making sure we have a home that isn’t falling down around us too, because major maintenance won’t be easy to afford when retired.  So to retire in the lifestyle we are used to we need to somehow do a knock down rebuild and pay it off completely. 

That figure seems really low to me.  A home requires maintenance or apartment living has associated costs such as strata fees or extraordinary levies.  People might require a cleaner/ gardener / in home care eventually.  It doesn't seem to factor in that people are living much longer.  

[Sugarplum Poobah]

People can't get defined benefit anymore because they were unsustainable -- the money to pay it out has to actually come from somewhere which is why accumulation schemes have supplanted them.

General question -- because I did a fair whack of my earlier working life overseas -- I know there's a limit to what you can add to your super pre-retirement, but can you add money from other sources (such as an inheritance) into a post retirement pension plan?

[Toby133]

Late 30's and about 250K in super. I want at least 1 M to retire. 

[dianalynch]

1 minute ago, verucasalt said:

That figure seems really low to me.  A home requires maintenance or apartment living has associated costs such as strata fees or extraordinary levies.  People might require a cleaner/ gardener / in home care eventually.  It doesn't seem to factor in that people are living much longer.  

Barefoot investor has it as the minimum for a comfortable retirement for a couple, plus you need a paid off home. It is the point at which a couple would still get the full age pension. From memory barefoot has this number as achievable- as  $1M is out of reach for most people. If you can do more, I think in his book he says knock yourself out, and spend on maintaining your home as well. 

[Bornagirl]

18 minutes ago, verucasalt said:

That figure seems really low to me.  A home requires maintenance or apartment living has associated costs such as strata fees or extraordinary levies.  People might require a cleaner/ gardener / in home care eventually.  It doesn't seem to factor in that people are living much longer.  

It would be fine if people could be assured that an ACAS assessment giving them home help would give it, like, now, when they need it. When one of them has arthritis and the other is recovering from a broken arm. Trouble is the wait for that is horrendous.

 

 

[Gumbette]

What would help is if stamp duty was heavily discounted for those nearing retirement / retired and downsizing.  It would free up larger houses for younger families as well as $ for a more comfortable retirement.  

Edited June 15, 2021 by Gumbette

[dianalynch]

16 minutes ago, Sugarplum Poobah said:

People can't get defined benefit anymore because they were unsustainable -- the money to pay it out has to actually come from somewhere which is why accumulation schemes have supplanted them.

General question -- because I did a fair whack of my earlier working life overseas -- I know there's a limit to what you can add to your super pre-retirement, but can you add money from other sources (such as an inheritance) into a post retirement pension plan?

 

‘Unsustainable’ the word I’ve heard trotted out for our welfare safety net, ndis, pay rises, and decent super schemes and contributions. Never to be heard in the context of negative gearing, excess franking credits, or the multitude of other welfare supports for the wealthy - aka ‘tax deductions/credits/rebates’ 

[LemonMyrtle]

28 minutes ago, verucasalt said:

That figure seems really low to me.  A home requires maintenance or apartment living has associated costs such as strata fees or extraordinary levies.  People might require a cleaner/ gardener / in home care eventually.  It doesn't seem to factor in that people are living much longer.  

Well, that’s in today’s figures, I think. So if you’re not retiring for 20 years, the equivalent would start to get close to say, $500k. But if you were retiring tomorrow, it’s a good place to be.