How much of your retirement income will come from super?
To balance between risk and return, it’s important to know how much super you'll need in retirement. Meet Michelle and Nick. Each have chosen different investment options to match their retirement needs.
Michelle is 67 years old and has a super balance of $450,000. She and her husband have investments outside super. They have $120,000 in shares and an investment property that generates rental income. Michelle has set up a retirement income stream with Aware Super. She pays herself a monthly income of $2,000, which is more than the minimum withdrawal amount set by the Government.
Michelle decides to invest her retirement savings in our Conservative Balanced investment option.
The Conservative Balanced option has been designed by our retirement experts with the needs of retirees in mind. It aims to:
- generate strong, consistent returns
- protect against the effects of inflation, and
- reduce the impact of large market falls on investment returns.
Michelle has modest spending needs, so lower returns are not an issue for her. If she needs to, Michelle can withdraw less from her super so it lasts longer. She'll be able to use her other income sources to support her retirement.
Nick is 64 years old and was a paramedic his entire working life. He was injured 4 years ago and had to retire early.
Nick's balance at retirement of $370,000, which is less than he’d planned. He decides to invest his super for growth in our Growth investment option. This option has the potential for higher investment returns, which could help Nick get a higher level of income.
This is a riskier option - with returns going up and down more frequently than Conservative Balanced. When COVID-19 hit, Nick’s super balance fell more than it would have if he had been in the Conservative Balanced option. But it also recovered more when markets rebounded. His income has been higher overall than if he’d invested his savings in a more conservative (or less risky) option.
Nick also gets the Government Age Pension, so he was able to rely on this while his super balance recovered.