There is considerable debate of the amount of income that people require in retirement. A number of factors influence the answer to this perplexing question.

But most importantly, the answer lies in what type of lifestyle you would like in retirement, and importantly, what lifestyle can you afford, and your eligibility for Government benefits such as the age pension.

Do you see yourself dining out at a top quality restaurant once a week, or will lunch at a local coffee shop satisfy your dining out experience?

Will your holidays consist of hitching up the caravan and travelling up or down the coats to your favourite beachside location, or is a week or two feasting on wine and cheese in Tuscany more your style?

Will you be travelling to your local shops in the latest European convertible, or is a compact car more appropriate, or in fact, will you be jumping on your local bus or train?

You see, the amount of retirement income you need is influenced by the lifestyle you would like to have, whilst the level of income you will receive will be determined by:
the amount of capital you have to invest to produce an income (such as superannuation),


your willingness to allow your capital to run down during retirement (as opposed to preserving all or part of it to pass on to the next generation),


your eligibility to receive Government benefits to supplement other income you may receive, and


the length of time the income will be paid for.
As a rough guide, some commentators suggest that an income in retirement of around 75% of pre-retirement income is adequate, however it has been generally accepted that a couple seeking a very basis lifestyle in retirement (in 2004) will need an income of around $25,000 per annum, whilst those seeking a more comfortable lifestyle will need in the vicinity of $45,000 per annum.

A basic lifestyle is one without any luxuries, whilst a more comfortable lifestyle will allow for some of life's luxuries like a visit to the theatre, nice clothes, a better car, the occasional overseas holiday, and money for home improvements.

When planning for your retirement lifestyle, it is important to be realistic. If you are a couple who are planning to live on the age pension alone, you will receive an income of just over $20,000 per annum (based on the maximum age pension for a couple as at September 2004). This will provide for a very basic lifestyle in retirement.

These comments are very general in nature and retirement income planning is very much influenced by your personal needs and circumstances. In order to plan for your retirement income, the earlier you start the better. But whether you have retired now, or are not planning to retire for another 20 years, a visit to a financial planning can be the difference between just surviving and living life to the fullest in retirement.

Supplied by Professional Invesment Services