When considering how much money you need to live on in retirement, important questions to ask include:
- What do I need each week, month or year for an acceptable standard of living?
- How long will my retirement savings need to last?
- How will my income needs be met?
Your retirement income may come from more than one source, including:
- Age Pension
- An annuity (from within or outside of super)
- An account-based pension (from your super)
- Other sources, such as investments or savings held outside super
Income from various sources can be 'layered' to meet your income requirements. This can be set up so that more secure income, such as from the Age Pension or an annuity, can cover your essential costs of living, while your income from other sources can fund your discretionary spending.
This approach can also allow your more growth-oriented assets to remain invested, giving them time to grow.
The composition of your retirement income requires careful planning to manage increases in the cost of living as well as market fluctuations if you invest in shares.
We recommend that you consult your financial adviser before acting, including on any general information provided here.