The answer to this question driven by what you want to do when you retire. By this I mean what are you intentions once you stop earning a full-time income?
The capital amount that you would require when you retire invariably depend upon the answer to the following questions:
- Do you want to relocate/ downsize and potentially releasing equity from your home?
- Are you continuing to earn an income doing casual or part-time work?
- Will you qualify for Age Pension? Age Pension income and assets test is quite generous in that you can have over $1m of assessable assets before you do not qualify for any pension amount.
- Will you have any major capital expenses when you retire? Common expenses are new car/caravan, renovate the bathroom and/or kitchen or go on an overseas holiday.
- How much ongoing income will you need to meet your living expenses?
Once we have the answers to these questions I can go about assessing what you need to set aside each pay packet to achieve your retirement objectives. Remember that time is your greatest asset (or greatest enemy). The sooner you start preparing for retirement the more effective the compounding of earnings will be.
If you would like to have some idea as to what you need to save regularly to achieve your retirement goals, give us a call and we can discuss your requirements.