Tag Archives: Financial Happiness

How much super do I need to retire in Australia?

By Robert Wright /August 22,2025/

The amount of super you need to support your retirement will depend on what kind of lifestyle you’re hoping to enjoy and how much income you’ll be earning in addition to your super savings. Income from the Age Pension, part-time work and other financial investments will affect the amount of super you need to retire comfortably.

The Association of Superannuation Funds of Australia (ASFA) provides yearly total income recommendations based on the type of retirement you’re aiming for. Depending on how much income you expect to receive from other sources, you can then estimate how much super you’ll need to reach the “comfortable” or “modest” benchmarks.

The table below gives you an idea of how much retirement income you might need to enjoy a comfortable, or modest retirement, and compares these benchmarks against how much you can receive on the Age Pension.

	Comfortable lifestyle	Modest lifestyle	Maximum rate of Age Pension
Single	$52,383	$33,386	$29,874.00
Couple	$73,875	$48,184	$22,518.60 (each) a year

Budgets for various households and living standards for those aged 65-84 (March quarter 2025)
Source: ASFA Retirement Standard

The amount of super you need will also depend on what you’re earning from full or part-time work, the Age Pension and other investments.

To enjoy a comfortable retirement, AFSA suggests that single people will need $595,000 in super savings at age 67, and couples will need $690,000. But your own individual goal will depend on your other income streams and personal situation.

In addition to the total amount of super you have, the way you access it once you retire can also impact your retirement wealth. For example, your super earnings might be subject to more tax if you plan to withdraw lump sums, compared to setting up a super income stream like an account-based pension.

What’s the difference between a comfortable and modest retirement in Australia?

A comfortable retirement means you can look forward to a broad range of leisure and recreational activities, with a good standard of living. ASFA guidelines suggest you’ll be able to purchase things like private health insurance, a reasonable car, good clothes and a range of electronic equipment. You’ll enjoy domestic and occasionally international, holiday travel.

According to ASFA, you can expect a modest retirement to be better than living on the government Age Pension. However, you’ll only be able to enjoy a fairly basic lifestyle.

See the charts below to get a more detailed understanding of what sort of services and luxuries you might be able to enjoy, based on your retirement savings.

	Comfortable lifestyle	Modest lifestyle	Age Pension
Medical	Top level private health insurance, doctor/specialist visits, pharmacy needs	Basic private health insurance, limited gap payments	No private health insurance.
Technology	Fast reliable internet/telco subscription, computer/android mobile/streaming services	Basic mobile, modest internet data allowance	Very basic mobile and limited internet connectivity
Transport	Own a reasonable car, car insurance and maintenance/upkeep	Owning a cheaper, older, more basic car	Limited budget to own, maintain or repair a car
Lifestyle	Regular leisure activities including club membership, cinema visits, exhibitions, dance/yoga classes	Infrequent leisure activities, occasional trip to the cinema	Rare trips to the cinema
Home	Home repairs, updates and maintenance to kitchen and bathroom appliances over 20 years	Limited budget for home repairs, household appliances	Struggle to pay for repairs, such as leaky roofs or major plumbing problem
Haircuts	Regular professional haircuts	Budget haircuts	Less frequent haircuts, or self haircuts
Home cooling and heating	Confidence to use air conditioning in the home, afford all utilities	Need to keep a close watch on all utility costs and make sacrifices	Limited budget for home heating in winter
Eating out	Occasional restaurant meals, home delivery meals, take away coffee	Limited meals out at inexpensive restaurants, infrequent home delivery or take away	Only local club special meals or inexpensive take away
Clothing	Replace worn out clothing and footwear items, modest wardrobe updates	Limited budget to replace or update worn items	Very basic clothing and footwear budget
Travel	Annual domestic trip to visit family, one overseas trip every seven years	Annual domestic trip or a few short breaks	Occasional short break or day trip in your own city

Annual budgets for households and living standards for those aged 65-84 (March quarter 2025)
Source: ASFA Retirement Standard

Do I need a second income stream in retirement?

This will come down to your personal circumstances, and what kind of lifestyle you’re hoping to enjoy when you retire.

Planning ahead is a great idea if you want to supplement your super with additional streams of income. For example, you could:

build up your financial investments
top up your super with salary sacrifice or a personal super contribution
find part-time employment
apply for the Age Pension.

What government benefits could I receive?

When you retire, you might be eligible for government benefits like the Age Pension or a concession card. This will depend on your age, your residency status, and your financial situation.

As of 20 March 2025, the maximum Age Pension is:

$1,149 per fortnight for singles ($29,874 a year).
$866 each per fortnight for couples ($22,516 a year).

If you’re eligible for the Age Pension, you may also be able to access additional government payments, such as:

Carer allowance: If you provide daily care to an elderly person or someone with a disability or a serious illness.
Rent assistance: To help cover your rent if you’re renting privately.

If you’re receiving the Age Pension, the government will automatically send you a Pensioner Concession Card. Even if you’re not eligible for the Pensioner Concession Card, you might still be able to get a Commonwealth Seniors Health Card, subject to being eligible.

Either of these cards will allow you to access:

cheaper medicines on the Pharmaceutical Benefits Scheme (PBS)
bulk billing for doctor’s appointments
reduced out of hospital expenses through Medicare.

Note that there may be additional concessions from state or territory governments, or from local councils and businesses.

How can I set myself up for the retirement I want?

Your first step will be to create a clear vision for the retirement you want. Ask yourself: What type of lifestyle do you want to enjoy in retirement? Modest, comfortable, or would you like even more freedom? Use the table above to figure out what you’d like your retirement to look like.

Secondly, are you currently on track to achieve this goal?

If you’re not quite on track to reach your goal, you can start thinking about strategies to boost your retirement wealth. This might include topping up your current super savings, working part-time, or building up your other financial investments.

If you’re unsure about the best way to set yourself up for a retirement which supports your personal goals, a financial adviser can help steer you in the right direction.

Calculating how much super is needed for retirement

A retirement calculator helps you estimate how much money you’ll need for the retirement lifestyle you want – and how much money you might have when you retire, based on your super savings and other assets.

The calculator will also show you the impact of potential investments, fees and voluntary contributions to your super and your retirement wealth.

Consider the ASFA benchmarks for a modest and comfortable retirement, other income streams like part-time work or investments and your own financial goals when determining how much super you’ll need when you retire.

How can I grow my super?

Topping up your super is a good way to boost your retirement wealth and may provide tax-concessions in the short term.

Currently, your employer must pay 12% of your ordinary time earnings into your nominated super fund. These contributions are called Superannuation Guarantee (SG) contributions. However, there are a few different ways you can contribute more of your own money towards your super.

As super compounds each year, even a small contribution can go a long way towards building up your retirement wealth so you can enjoy the type of retirement you want.

If you’re still not sure about the best way to set yourself up for retirement, consider speaking with a financial adviser. They’ll review your personal situation and help you find the solution which best suits your life stage, financial goals and risk tolerance.

Source: Colonial First State

Federal Election 2025

By Robert Wright /May 23,2025/

During the Federal Election campaign, the Government made a number of election promises, which may impact your finances. There were also a number of support measures proposed in the recent Federal Budget. What could this mean for you?

These announcements are proposals only and may or may not be made law. The information below, including the policy details and proposed start dates, is based on the information announced as at 5 May 2025. You should speak to your financial adviser to discuss how these proposals could apply to you.

Election promises

Taxation

$1,000 instant tax deduction for work-related expenses, proposed from 1 July 2026.

What’s proposed?

Taxpayers who have eligible work-related expenses may be able to claim a tax deduction of up to $1,000 without having to keep individual receipts. It will still be possible to claim work-related expenses above this limit, however evidence will be needed.

Who could benefit?

The deduction will be available to people with ‘labour income’. This doesn’t include income from running a business or from investments, where the usual rules will continue to apply.

$20,000 small business instant asset write-off extension, proposed from: 1 July 2025 to 30 June 2026.

What’s proposed?

The higher instant asset write-off threshold of $20,000, which currently applies until 30 June 2025, is proposed to be extended for another 12 months until 30 June 2026. The threshold is available for more than one asset. Eligible businesses can continue to place assets valued at $20,000 or more into a depreciation pool, where a deduction of 15% can be claimed in the first income year and 30% thereafter.

Who could benefit?

Small businesses with an aggregated annual turnover below $10 million will be able to claim an immediate tax deduction for the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use by 30 June 2026.

Help for home buyers

Expanded ‘Help to Buy’ scheme, proposed from: to be confirmed.

What’s proposed?

The Government has proposed to expand access to the Help to Buy scheme to more home buyers by increasing the property price caps and income test thresholds, which determine eligibility to participate in the scheme.

The scheme is a shared equity scheme, which allows eligible home buyers to purchase a home with a smaller deposit, of as little as 2%. The Commonwealth will contribute up to 30% of the purchase price of an existing home and up to 40% of the purchase price of a new home.

The Help to Buy scheme is expected to open for applications later this year. Although the Federal Government has legislated the scheme, the States and Territories need to pass legislation for it to operate in each jurisdiction.

Who could benefit?

Increasing the income cap and property price caps will enable more people to participate in the scheme.

For singles, the income cap will increase from $90,000 to $100,000. For joint applicants (and single parents), the income cap will increase from $120,000 to $160,000.

The property price cap will depend on the location of the property and details can be found in the Government’s media release.

Participants must meet a number of eligibility rules and conditions, including repaying the Government when the home is sold or when certain changes occur in their circumstances. So it’s very important to understand the rights and responsibilities of participating in the scheme before making an application.

Previously announced measures

Cost of living support

The below proposals were announced by the Government in the March 2025 Federal Budget.

Energy bill relief extended for six months, proposed from: July 2025.

What’s proposed?

The Government will provide further energy rebates in addition to the bill credits people have received since July 2024. The rebate will be applied automatically to electricity bills between 1 July and 31 December 2025, in two quarterly instalments of $75.

Who could benefit?

All Australian households and eligible small businesses will receive the additional energy rebate. It’s expected the eligibility rules that apply to small businesses (quarterly power consumption) will not change.

Lower cap for PBS medicines, proposed from: January 2026.

What’s proposed?

The maximum cost of Pharmaceutical Benefits Scheme (PBS) medicines will decrease from $31.60 to $25 per script.

Who could benefit?

This will benefit people who don’t hold a concession card and would otherwise pay the maximum amount to fill a script. It doesn’t apply if the script is for a medicine not on the PBS, which may cost more than $25. Pensioners and Commonwealth concession cardholders will continue to pay the subsidised rate of $7.70 per PBS script until 1 January 2030. This is an existing measure.

Student loans to be cut by 20%, proposed from: 1 June 2025.

What’s proposed?

Student loans will be reduced by 20% before the annual indexation (at a rate of 3.2%) is applied on 1 June 2025.

Who could benefit?

The changes will benefit all people who have Higher Education Loan Program (HELP) Student Loans, VET Student Loans, Australian Apprenticeship Support Loans, Student Start-up Loans and Student Financial Supplement Scheme, based on their outstanding 1 June 2025 balance.

Importantly, voluntary loan repayments that are processed before 1 June will reduce the loan balance that’s indexed on 1 June. However, the 20% debt reduction will be applied to the 1 June balance. So if this proposal is legislated, before making a voluntary repayment, it’s worth doing the numbers to see if it’s best to make a voluntary repayment before or after the 20% reduction and indexation is applied on 1 June. The table below provides an example which shows the difference between making a $5,000 voluntary repayment before and after 1 June, where the outstanding debt balance is $30,000.

Outstanding debt today

Voluntary repayment before 1 June

Loan balance on 1 June (after 20% reduction and indexation applied)

Voluntary repayment after 1 June

Outstanding balance

$30,000

$24,768

$5,000

$19,768

$30,000

$5,000

$20,640

Reduced student loan repayment obligations, proposed from: 1 July 2025.

What’s proposed?

The minimum income that can be earned before student loan repayments need to be made is proposed to increase. This is in addition to the standard indexation of the income repayment thresholds which ordinarily happens on 1 July each year. Also, the way repayments are calculated will be changed.

Who could benefit?

People with student debts will benefit from lower compulsory loan repayments in 2025/26 and beyond, if their ‘repayment income’ is above the minimum threshold at which loan repayments need to be made and less than $180,000.

The minimum income threshold is $54,435 in 2024/25 and will automatically increase to $56,156 on 1 July. Also, the Government has proposed:

increasing the minimum income threshold to $67,000; and
calculating repayments on just the repayment income earned above the income threshold, not on total income.

The list of qualifying student loans is the same as those to be eligible for the 20% debt reduction on 1 June 2025 (see above).

Expanded ‘First Home Guarantee’ program, proposed from: to be confirmed.

What’s proposed?

Help will be extended to all first home buyers under the Commonwealth’s First Home Guarantee Scheme. The scheme enables home buyers to purchase their first home with as little as a 5% deposit. The Government provides a guarantee for the remaining portion of the deposit (up to 15%), to ensure the first home buyer doesn’t pay Lenders Mortgage Insurance.

Currently, income limits and property price caps apply and access is only granted to a maximum of 10,000 eligible participants each year. These requirements are proposed to be removed, opening the scheme to all first home buyers.

Who could benefit?

The extension of the scheme may help first home buyers to purchase their first home sooner. It’s important to understand that purchasing a home with a smaller deposit may increase the total interest that is paid over the life of the loan.

Superannuation

The below measure was initially announced by the Government in 2023, with support reconfirmed in the 2023 Federal Budget. Legislation was introduced to Parliament to make this change law in 2024 but lapsed when the election was called. The Government will need to reintroduce and pass legislation in Parliament before this change can take effect. Given the complexity of the policy and the number of days that Parliament may sit between now and 1 July, we don’t know if the proposed start date will change if the policy is reintroduced.

Higher taxes for balances over $3 million, proposed from: 1 July 2025.

What’s proposed?

Where people have more than $3 million in super (both accumulation and retirement values) from 1 July 2026, higher taxes are to be paid on investment earnings, with payment due in the 2027 financial year.

Currently, investment earnings within the ‘accumulation phase’ of superannuation are taxed at a maximum rate of 15%. With a ‘retirement phase income stream’, such as an account-based pension once retired, investment earnings are generally tax free.

It’s proposed that from 1 July 2025, where a person has a ‘total super balance’ exceeding $3 million at the end of the financial year, an additional tax of 15% will apply to a portion of the investment earnings. The new tax will be called ‘Division 296 tax’, as that is the name of the relevant section of tax law where the proposed rules are covered.

Additional tax won’t be paid where the total super balance is less than $3 million on 30 June 2026 (the end of the first year it will apply) or the end of any following financial year.

Where to from here?

It’s important to remember these changes need to be legislated to become law. The information above is based on the announcements made to date, and there may be changes to the start dates or other details if the policies are formalised. You should speak to a financial adviser to understand more about what has been announced and how these changes could apply to you.

Source: MLC

Supporting your kids, without sacrificing your own retirement

By Robert Wright /July 30,2021/

In the past, wealth was often passed on through an inheritance. But with our longer lifespans, and the higher cost of living (especially housing), the desire to help our kids while we’re alive and well is increasing.

If your children are young, you may have twenty or thirty years to save and invest on their behalf, while also saving for your own retirement. If this is the case, it pays to put a strategy in place early on.

For those nearing retirement age, or already retired, you may have a large lump sum you’d like to gift to one or more of your kids. Giving money is a wonderful thing to do, but it’s not always simple. It can have tax implications, and may affect your income support payments from Centrelink. On the other hand, gifting may enable you to increase your government pension payments or benefits, if done right.

So how can you help your children without compromising your own financial security and comfort in retirement?

Ensure you’re on track for a comfortable retirement

Before you give away your wealth, it’s important to remember that you need to fund your own retirement for many years.

Australians are living longer than ever, with more years spent in retirement. If you were to retire at age 60, and live to 90, that’s one whole third of your lifetime spent in retirement.

As well as wanting to enjoy your retirement through travel or leisure activities, older age often comes with more medical and health expenses.

So it’s really important to make sure you have enough funds saved and invested to get you through. This might sound selfish, but in reality, it means you won’t become a financial burden on your children later in life.

How much will you need to retire, and, how much can you afford to give away now? It’s always best to seek professional financial advice to ensure you have enough put away to see you through. A financial planner will be able to give you tailored advice about the impact of your giving on your retirement plans.

What am I giving money for?

Next, consider what it is you’d like to help your son or daughter with. Are the funds for a property deposit? To pay for a wedding? Education expenses? This might offer some clue as to the right amount of support.

Following on from this, consider how many children you need to help. If you gift funds to one child, do you need to match that for others when the time comes? If you have several children, but some are doing better than others, do you need to help them all equally?

Balancing the family dynamics around money is important, as it can be a sensitive issue. The last thing you want to do is cause a rift in the family over some perceived inequality. If you do have several children you need to help, keep this in mind, as it will limit how much help you can offer each child.

Giving an incentive

Often the best way to support children financially is to match their own contribution. Rather than purchasing something outright, offer to base your assistance on their own savings. This also means they have a vested interest in the item, which means they’re likely to treat it more carefully.

How should I give money?

If you receive the Age Pension or other benefits from Centrelink, there is a limit to how much you can give away. The gifting rules allow you to give $10,000 over one financial year, or $30,000 over five years. You’ll need to let Centrelink know when you’re planning to give a gift of this type.

If you’re considering giving your children a substantial amount of money, it’s worth taking the advice of Dr Brett Davies at Legal Consolidated. He recommends always giving funds as a loan ‘payable on demand’, not as a gift. Creating a written loan agreement helps keep the money in your family, even if things don’t go to plan.

Consider this. You gift your daughter $400,000 to buy a house. Five years later, she divorces from her husband and the house is the only asset of the marriage. The Family Court awards half of the value of the house to the husband, including $200,000 of your donated funds.

If you instead had a valid loan agreement in place, the loan must be paid out before the assets are distributed. Hence, the $400,000 comes back to you, to do with as you please.

Always seek professional legal advice when drawing up a loan agreement to ensure that it’s compliant with the law, properly worded and correctly executed.

Get professional advice

If you’re nearing retirement and looking to give up work, downsize your home and/or gift funds to your children, it’s important to seek financial advice.

A financial planning professional will be able to give you tailored advice about the impact of your planned giving. They can also help you work out a strategy for meeting multiple goals, such as giving to several children while funding your own comfortable retirement.

Source: Money & Life

6 steps to help you feel more positive about your finances

By Robert Wright /July 16,2021/

With one in four Australians reporting more financial stress after COVID, it’s no surprise many of us are concerned about the future. Between mounting bills, unexpected expenses and a lack of understanding around our needs in retirement, getting our savings on track and seeing the big picture can seem overwhelming.

It doesn’t need to be. If you break things down into small, manageable actions, you can create a simple plan to take immediate positive steps towards a healthy financial future.

Assess your debts

Debt is a reality for many Australian households, whether it’s a home loan, credit card, student loan, car finance or personal loan. It’s not uncommon to lose track of how much you owe and how much interest you’re paying as a result.

Understanding your debts can help you put a plan into action to pay them off sooner and in the optimal order, potentially saving you a lot of money. There are steps you can work through to manage what you owe and work out your priorities – such as making a list of all debts and their sums and categorising each as ‘good’ or ‘bad’.

Plan how to pay your bills

Some 14% of Australians report they have been unable to pay one or more bills on time in recent months, a reality that may be compounded through winter as extra heating sees utilities skyrocket.

One way to manage irregular bill amounts and unexpected rate spikes is to consider bill smoothing, a process where you establish automated payments of a set (and known) amount to cover utilities over the course of a year.

Establish an emergency fund

Putting aside extra money for that rainy day sounds simple, but it’s one that many Australians neglect – in fact, one in four of us believe we wouldn’t be able to raise $2,000 in a week if we needed to do so in an emergency.

If you are that one in four, it’s a good idea to set up an emergency fund as a separate account – it acts as a buffer from debt, helping you prepare for life’s curve balls. Keeping it away from your day-to-day savings account means you’re not tempted to dip into it for known, budgeted expenses such as rent or mortgage, groceries or school fees.

Look at your super

The government’s Early Release Scheme in 2020 saw 3.5 million Australians take advantage of the ability to dip into their super early. For many, having access to these funds helped ease immediate financial stress. If you’re not sure how to build this money back, you’re not alone – 30% of those who accessed their fund report a lack of awareness of how to recover their balances.

A good first step is to calculate how much money you’ll need in retirement – there are various online tools to help you do this – then you can consider some of the ways you could rebuild your super and work out which one suits your circumstances.

Work on a savings plan

Deciding to pay yourself first – say, 10% of your income – is one simple way to boost your savings and improve your financial future, making you contribute a set amount of money into a savings account before you manage other household expenses.

It’s also a good idea to set up a separate savings account with a high interest rate. Then make sure that set amount of your salary, as well as any surplus in your day-to-day account, is automatically rolled over into your savings at the end of the month. Automating your accounts allows you to set and forget, so your nest egg will automatically grow every time money is deposited.

Think about any long-term financial goals

At what age do you want to be able to buy your first house? When do you want to retire? Do you know how much you need in your superannuation fund to retire comfortably? Many of us sweep these big questions under the carpet, but understanding them can help you prepare for your financial future.

Once you’ve mapped out your current financial position and established your long-term goals, you can use a range of online tools and calculators to help you get there.

You can also speak with your financial adviser to help get your savings goals on track and make sure you head toward retirement with peace of mind. Source: AMP