One of the risks retirees can face is the potential to run out of retirement savings by living longer than expected—commonly referred to as longevity risk.
When it comes to retirement, many of us may receive retirement income from various sources. For example, investments (inside and outside super) and social security entitlements, such as the Age Pension.
Financial success can hold a different meaning for all of us. Despite this, financial success is often linked to something we all tend to have in common, financial goals—our vision for the future. This vision can often centre on retirement (and our desired retirement lifestyle) and the accumulated wealth needed to support it.
The financial lifecycle model is a simple framework to help you understand wealth accumulation and cash flow generation—your progression from financial dependence to independence.
When it comes to retirement, ASFA estimates that the lump sum savings needed to support a comfortable lifestyle in retirement is $640,000 for a couple. Please note: This assumes a partial Age Pension entitlement.