Lowdown on how much we need in retirement

The real experts – the people who have already retired and know what it’s like – share their tips

- Marcus Padley

If you search online for the title “How much do I need to retire?”, you will see hundreds of articles on the subject, most of which have been written by financial planners, fund managers and accountants. The Marcus Today “community” has many financially sophisticated (and unsophisticated) retirees in its ranks, many of whom have already experienced decades of retirement, so we decided to take a different approach and rather than tell our members how to retire, we asked them how to retire, because, quite honestly, we’re not retired, and a lot of them are, so who should be lecturing who?

We asked our members two simple questions: “What is your retirement calculation?” and “Do you have any other retirement wisdom to share?” We received around 200 emails in reply. Here are some of the numbers, some of the revelations and some of the wisdom.

The answer to the question “How much you need to retire?” clearly revolves around three other questions, and the answers come in ranges, with a thousand variables and what-ifs. But there is a standard answer:

•How much do you need to live off each year in retirement?

The answer is generally $65,000 (singles) to $200,000 (wealthy couples) a year with most assuming around $100,000.

•What return on investment on your capital can you expect?

The current number is anywhere from 3% to 10%pa (less inflation) with most retirees assuming they could and should be able to earn 5%pa after inflation.

•So how much in savings do you need to retire?

The capital required from those calculations ranges from $650,000 to $6.6 million with $2 million the standard amount for a $100,000pa income and an investment return of 5%pa.