If you want to enjoy retirement, you’re going to need to think about what that actually means. What do you find fun? What have you always wanted to do after you stop working?
Setting retirement goals is an excellent way to assure you get the most out of your golden years. Not only will it mean you have an action plan for actually achieving these goals, but you will also be able to work out how much super you need for the retirement you want.
With that in mind, what are some common retirement goals? Here we have outlined three of them, to help inspire you.
Related: ‘How to have a happy retirement’
1. Living a comfortable lifestyle in retirement
According to the Association of Superannuation Funds in Australia (ASFA), sustaining a comfortable lifestyle per year of retirement would cost:
- Single person: $42,597 per year
- Couple: $58,326 per year
To obtain these yearly figures, ASFA estimates singles will need a superannuation lump sum of $545,000 when they retire to sustain a comfortable lifestyle. Couples would need $640,000. This assumes that the retirees would also be receiving a partial Age Pension.
Reaching the ‘comfortable lifestyle’ goal
To reach this goal, firstly find out how much super you are likely to have at retirement. ASIC’s MoneySmart Superannuation calculator is a great tool to use to get help work out how much super you’ll have when you retire. If your balance is likely to fall short of your target, below are some strategies worth considering to help you get there:
- Salary sacrifice part of your salary
- Top up your super with one-off voluntary payments, or your partners account through spousal contributions
- Consolidate multiple accounts, which may help reduce overall superannuation fees
2. Owning and living in your own home
One of the ultimate goals of many a senior is to own and live in his or her own home.
Thankfully, living in your own property post-65 years-old is something that can be planned for.
Reaching the home ownership goal
For most Australians, home ownership will be achieved through the help of a home loan. There are plenty of home loans in the market, so the best place to start might be with a mortgage calculator to figure out, based on what you can afford to repay, how long it will take you to own a home outright.
Of course, once you own it outright, and the kids have left the nest, you have options that could help you in retirement. For instance, Sorted recommends considering downsizing as a way of increasing your retirement savings. Assuming the bigger house attracts a higher value than the new, downsized place, the surplus could be used to further support your retirement.
3. Knocking off the bucket list
When you stop the average 33 hours per week that the Australian Bureau of Statistics states Aussies work, you’ll have more free time to pursue everything you’ve ever dreamed of doing, but didn’t quite get around to before.
Indeed, this is why many people compile bucket lists, outlining each and every activity they would like to do before ‘kicking the bucket’ (hence the name).
Saving for a bucket list
You can’t just say, “I’ll finish my bucket list in retirement” and hope for the best – you need to think about how much it might cost.
For example, a person who is interested in taking up new sports and hobbies will likely require less income after retiring than someone who would like to see every Wonder of the world, or step foot on every continent (including Antarctica).
The yearly cost ASFA estimates for a ‘comfortable lifestyle’ in retirement assumes an annual holiday within Australia, so if you have overseas travel plans, it could be wise to factor this into your retirement savings plan.
See our blog ‘The real costs of retirement‘ for more on the topic.
How to choose your goals
So which activities will your bucket list include? We recently wrote a blog on this, so check out ‘How to choose the right bucket list‘ for some inspiration!
Are you the ‘see the world’ type of person, do you need to meet certain public figures, or do you fit somewhere under the category of ‘other’?
What will your retirement look like?