Planning for retirement - Investments & advice

Planning for retirement

How much money you will need when you retire depends on the annual income you want to live on and the number of years that you’ll be relying on your own funds. The higher the income you want, and the longer you need it, the more money you’ll have to save.

If you’re a 60 year old male and retire today, the general rule is that you should plan for your retirement funds to last for at least 20 years. You should plan for longer if you’re a female.

Some of the other things to consider are:

the earlier you plan to retire, the longer your money will need to last
whether your home and any other large debts will be paid off
whether you will work part-time or on a casual basis in retirement
what you want to do in your retirement years and how much this will cost
what capital expenses you will have in retirement (eg a new car, house repairs) and how much you will need for these expected, as well as unexpected, expenses.

With the right investment strategy, products such as allocated pensions and annuities can make your money work for you. Advantages of investing in these products include:

tax-effective, regular income
increased eligibility to potential Centrelink entitlements
greater income via investment returns.

The tables below show various scenarios of how many years a person’s superannuation will last in retirement, ranging from investing to not investing, and the potential benefit of seeking a higher rate of return.

How long will your super last if not invested?*

	Amount of super available at retirement
Amount of super drawn each year	$200,000	$400,000	$600,000	$800,000	$1,000,000
$20,000	10 yrs	20 yrs	30 yrs	40 yrs	50 yrs
$40,000	5 yrs	10 yrs	15 yrs	20 yrs	25 yrs
$60,000	3 yrs	6 yrs	10 yrs	13 yrs	16 yrs
$80,000	2 yrs	5 yrs	7 yrs	10 yrs	12 yrs
$100,000	2 yrs	4 yrs	6 yrs	8 yrs	10 yrs

How long will your super last if it is earning 4% per annum?*

	Amount of super available at retirement
Amount of super drawn each year	$200,000	$400,000	$600,000	$800,000	$1,000,000
$20,000	12 yrs	39 yrs	50 plus yrs	50 plus yrs	50 plus yrs
$40,000	5 yrs	12 yrs	22 yrs	39 yrs	50 plus yrs
$60,000	3 yrs	7 yrs	12 yrs	18 yrs	27 yrs
$80,000	2 yrs	5 yrs	8 yrs	12 yrs	17 yrs
$100,000	2 yrs	4 yrs	6 yrs	9 yrs	12 yrs

How long will your super last if it is earning 8% per annum?*

	Amount of super available at retirement
Amount of super drawn each year	$200,000	$400,000	$600,000	$800,000	$1,000,000
$20,000	19 yrs	50 plus yrs	50 plus yrs	50 plus yrs	50 plus yrs
$40,000	6 yrs	19 yrs	50 plus yrs	50 plus years	50 plus yrs
$60,000	3 yrs	9 yrs	19 yrs	50 plus years	50 plus yrs
$80,000	2 yrs	6 yrs	11 yrs	19 years	50 plus yrs
$100,000	2 yrs	4 yrs	8 yrs	12 yrs	19 yrs

^*NB: The figures in the table are illustrations only and are not predictions or estimates of the actual number of years your accumulated super will last. Chart excludes individual taxation circumstances and any ongoing fees or interest charged.

These figures assume:

- contributions are paid evenly throughout each year
- no tax is payable on superannuation upon commencement of retirement
- interest earned is not subject to tax.

Be better off

ANZ Financial Planners are dedicated to providing you with information so that you can make the decision that is right for you.

Planning for retirement - Investments & advice