According to the Association of Superannuation Funds of Australia, you will need about $640,000 as a couple to retire comfortably and $545,000 for singles to retire comfortably. The $303,000 you save from the time you are 35 will, therefore, not cater for your comfortable retirement. ASFA only calculated the funds needed to provide for food, a few leisure activities, house renovations, medical insurance and other basic needs. You might have to rely on Prospa for loans if you need to do more.
If you want to travel after you retire, you might need more money than ASFA estimated. This means, more than $1 million need to be in your savings account.
Now, consider someone who started saving when they were 20 years old. This person saves $4,500 per year for 45 years. If the money earns 4 percent annual return, the person will have $1 million by the time they retire. With $1 million, you not only cater to your basic needs, but you can also travel within Australia or neighbouring countries and enjoy life. If you can, however, start a small business, funded by Prospa, you may enjoy your retirement even more.
Why should you save when you get a pension upon you retiring?
Pension only caters for basic needs; food, medical insurance and other such needs. When you are faced with small issues such as a leaking roof, you might need to call for help — those who rely on pension alone end up looking for employment or starting a business. If you choose to start a business, Prospa can help fund your idea.