Industry research has estimated that most people need approximately 2/3rds of their working income to maintain their current lifestyle in retirement.
Once you have determined your required annual income, you then need to establish exactly how big your retirement nest egg needs to be to provide that level of income for life.
The table below shows the level of capital required for some income levels, assuming retirement at age 65 years and that the income will be paid for an average life expectancy.
|
Annual retirement income ($) |
Capital required for earning rate of 6% pa |
Capital required for earning rate of 8% pa |
|
60,000 |
1,030,000 |
929,000 |
|
55,000 |
829,000 |
749,000 |
|
50,000 |
779,000 |
689,000 |
|
45,000 |
729,000 |
649,000 |
|
40,000 |
649,000 |
549,000 |
|
35,000 |
530,000 |
490,000 |
|
30,000 |
430,000 |
400,000 |
|
25,000 |
370,000 |
330,000 |
|
20,000 |
310,000 |
280,000 |
Assumes funds invested in allocated pension
Life expectancy for a 65 year old male is 17.7 years