The ASFA Retirement Standard
1Budgets for various households and living standards for those aged around 65 (December quarter 2019, national)
Retirement income simulator
Making a retirement budget
Sometimes the most helpful things are the most obvious – in this case, creating a good old budget can help give you an idea of what your financial needs will be in retirement.
As you go about using these tools, remember to think about your current expenses and how they might change by the time you retire.
For example, if you have a mortgage, will you have paid this off by the time you retire? If you are currently looking after children or other family members, will these arrangements still be in place by the time you retire? If you currently have a car – or two – will you be able to make do without it, or primarily use alternative methods of transport after you stop working?
While some of your current expenses may disappear, remember to also think about the kinds of new expenses that may emerge in retirement.
Some of these may be more fun than others – for example, with all the new-found freedom you’ll have in retirement, you may be planning to travel more than you currently do. On the other hand, as you get older, your health needs may also change, which means you may need to spend more on health-related expenses.