how much will I need in retirement?

Linda Panaszek, HESTA Superannuation Specialist:

The first question members ask when they think about retirement is when can I get my money?

Although the answer is relatively straightforward, when you meet a condition of release, it's possibly more important to understand how long your super will last.

Remember, once your super balance is gone, the maximum age pension income sits below the poverty line.

So the better question to answer is have I got enough in super and will it run out?

A study from the RMIT University found that of those soon to be retired, 60% worry about running out of money while 73% don't know how much they will have in retirement.

The comfort our members get from understanding their own situation and gaining control of it is their light bulb moment.

It might be that they need to save a little bit more or be pleasantly surprised that from here their retirement will be fine, or maybe that from here anything more saved will be a bonus.

How much do we need in retirement?

Everyone's financial situation is different.

First, you need to figure out how much you're likely to spend each year.

Getting closer to retirement may mean you have a better understanding of what your annual budget might look like.

Fine tuning this starts to put the picture into focus.

If you're not sure what that looks like, jump onto your member only Future Planner.

Just log into your online account to get started.

Future Planner uses estimates based on what current retirees are spending to help you get a sense of what you might need.

Use those estimates or your own to test out different scenarios.

Second, think about how many years you might need your regular income to last.

This is never an exact science.

Knowing when you plan to retire can help with a start date, but to know the end date, you'd need a crystal ball.

So instead we use the average life expectancy.

Future Planner allows you to play with the date you retire so that you can see how this effects how long your super could last.

Income from super and other assets might provide your income needs in retirement.

Most will use their super or other assets to supplement their income.

Future Planner is a great way to step through this calculation.

It will ask you questions that will help you personalise the outcome and understand what can be done to bridge the gap between what you need and what you are currently projected to have, if there is one.

Now you know the basics, but as we've mentioned, there are a few variables which make calculating how much you need very personal.

A quick chat can make sure you're on the right track.

Jump on to a live chat or call our retirement hub to work through what you're aiming for and how you can reach your retirement goal.