The Coronavirus has made a lot of us think about our own mortality and how threatening life can be. But it should also have made us mindful about how much money we need to live on, as many of us weigh up working from home and not going to the office.

While many of us think about where we want to live our life, some workers are wondering if they can relocate to the country and work remote, maybe going to the office once or twice a week.

All these questions and the answers you come up with makes you confront something most Aussies choose to ignore — their super!

The Daily Tele reminds us that “during the pandemic, almost three million people have withdrawn $36 billion from super accounts under the government’s early access scheme. Experts warn this depletion will severely reduce retirement incomes”.

This means many of these people as well as others who don’t respect their super and work to get the most out of it, will end up on the pension. And there are 430 reasons to be conscious of your super because $430 is the amount of the weekly pension! Living on that in a big city is a challenge, especially if you’re too old to move back home and rely on your parents.

The Association of Super Funds Australia (ASFA) has worked out that the average person, who retires at age 67, needs $545,000 as a single or $640,000 as a couple to generate a pre-tax income of around $65,000 a year, which actually includes a part pension.

A single person who owns their home can have up to $583,000 of assessable assets, such as super and still receive a part pension. For a single non-homeowner, the threshold is $797,500. For a couple who own their home, the threshold to $876,500. So anyone with less than this in super can access a part-pension, which can be added to their super pension, explaining how $640,000 in super for a couple delivers $65,000 a year. For a non-homeowner couple, the threshold is $1,091,000.

But the big question is: are you on track for ASFA’s calculated comfortable retirement?

Here are the benchmarks for what you should have in super at various ages for a comfortable retirement:

• A 30-year-old should have a super balance of $61,000.
• A 40-year-old should have a super balance of $154,000. 
• A 50-year-old should have a super balance of $271,000.
• A 60-year old should have a super balance of $430,000.
• A 67-year old should have a super balance of $545,000 and $640,000 for a couple.

All these numbers are based on you staying in super and remaining exposed to the stock market, so your fund can average a return of 6.7% a year. With help from a part-pension, you end up with around $65,000. But what if you don’t want to be beholden to the stock market? And what if you want more than $65,000 a year to live on in retirement?

Many years ago, ASFA actually told us the formula for money happiness in retirement. The calculating types worked out a key equation for a blissful time after you leave work.

They said you’ll want two-thirds of your final pay-packet when you retire. So if you’re on $100,000, you’ll want around $66,000, which is close to ASFA’s $65,000.

However, if you’re on $120,000, you might want $80,000. And if you’re now earning $180,000, you might like $120,000!

Let’s take this $80,000 figure and find out what you’ll need to have in super to make it happen. With a million dollars in your nest egg at retirement age, you’ll need to consistently get an 8% return. That might mean you’ll need to be in the stock market to get those returns up.

Term deposits are around 1%, so to get 8%, our financial planning clients might have 60% of their assets in stocks (local and foreign) and then we try to get better returns in less risky bond funds and so on. But they’re not risk free.

If you want a retirement life with less exposure to the stock market and with less risk, so you’re only looking for, say, a 4% return each year, then you better get cracking and build up your super so you retire with $2 million in super. And you might want some exposure to property as well. But make sure you don’t buy a dud investment property, where not enough potential tenants want to live.

At the end of the day, you might need help to plan your financial future, linking your goals to your income now and in the future, and then keeping in mind your attitude to risk.

If you’re not the type who likes to plan or work with a financial planner, then you should get into a good industry super fund that doesn’t charge too much, be a balanced investor and try to buy and pay off a property before you retire, so you have a backstop in case things don’t work out. Getting super and retirement interested might be a better way to go!