MoneySmart
(ASIC)

Take some of the guesswork out of planning for the future. Work out how much super you'll have when you retire, and if it will be enough to fund the lifestyle you want.

It's never too soon to start planning for a better financial future.

Estimate how much super you'll have

You probably know how much super you have now, but do you know how much you'll have when you retire?

Use the Moneysmart retirement planner to estimate:

• how much money you'll have to spend each year once you retire
• how fees, investment options and contributions will affect your retirement income

You can also use the planner to test out different scenarios and work out how to grow your super.

Use our retirement planner

Estimate how much super you'll have when you retire.

How much super you'll need when you retire

The amount of super you'll need when you retire depends on:

• your big costs in retirement, and
• the lifestyle you want

Most people can now expect to live well into their eighties. This means that if you stop working at 65, you'll need retirement income for 20 years or more.

You might be nervous about your investments or super at the moment. But don't make any rash decisions based on falls or gains in the markets.

Find out the steps you can take to make well-informed investment decisions.

Your big costs in retirement

Think about any big costs that might be part of your retirement plans. For example:

• paying off your mortgage
• rent
• renovating your home
• travel
• medical costs

The lifestyle you want

Think about how you plan to spend your money in retirement. If you own your own home, a rule of thumb is that you'll need two-thirds (67%) of your pre-retirement income to maintain the same standard of living in retirement.

The Association of Superannuation Funds of Australia (ASFA) provides an industry retirement standard. This estimates how much money you'll need, depending on your lifestyle.

Source: ASFA, June quarter 2020

ASFA estimates that the lump sum needed at retirement to support a comfortable lifestyle is $640,000 for a couple and $545,000 for a single person. This assumes a partial Age Pension.

ASFA estimates that a modest lifestyle, which covers the basics, is mostly met by the Age Pension. They estimate the lump sum needed to support a modest lifestyle for a single or couple is $70,000.

Build up your super

Many things contribute to your income in retirement, including investments outside of super and assets such as your home, especially if you downsize.

If you decide it is important to build your super, there are some actions that can make a big difference over time. Think about:

• consolidating your super into one account so you pay fewer feesm
• making extra contributions to grow your superchan
• changing your super investment options

If you don't have as much as you'd like, it's never too late to build up your super to boost your retirement savings.

Throughout your working life, check your super at least annually. Check your fund has the correct personal details and tax file number (TFN). Review your employer's contributions, and your account fees, investment options and insurance. If you're not satisfied or don't understand any details about your fund, call them and ask questions.

If you need financial advice

Planning for your retirement is complex, and everyone's situation is different. Think about getting personalised advice from a financial adviser to help you plan ahead. Many super funds also provide this service.

Daniel McCulloch
(Australian Associated Press)

Unemployed Australians will soon receive $100 less per fortnight as coronavirus supplements are extended at a reduced rate.

Prime Minister Scott Morrison is cutting the fortnightly pandemic payment to $150 from the end of December and extending it until March.

Single people on JobSeeker will receive up to $815 a fortnight from the start of next year.

Mr Morrison stressed the need to encourage people into work.

"We cannot allow the lifeline that has been extended to now hold Australia back as we move into the next phases of recovery," he told reporters in Canberra on Tuesday.

The coronavirus supplement initially doubled the $550 dole before being reduced in September.

Mr Morrison is not ruling out increasing the JobSeeker base rate beyond March.

"We haven't made a final decision on that," he said.

"Right now what matters is the supports that will continue to be provided at these elevated and temporary levels."

Opposition Leader Anthony Albanese said it was extraordinary the dole was being docked.

"They've cut both wage subsidies through JobKeeper and they're cutting JobSeeker when the government itself says more people will go on to unemployment benefits between now and Christmas," Mr Albanese said.

"Now is not the time to be withdrawing support from the economy."

The temporary reprieve will not satisfy community organisations, business groups, unions and economists calling for a permanent increase to the dole.

Business Council of Australia chief executive Jennifer Westacott is demanding a long-term solution.

"Why shouldn't unemployed people have the same certainty and predictability, instead of living from three months to three months, and get a decent, adequate allowance that allows them to live with dignity?"

More than 1.5 million Australians on JobSeeker, Youth Allowance and parenting payments are receiving boosted welfare payments.

Once the coronavirus supplement is stripped away altogether, the dole is set to return to its pre-pandemic rate of $40 a day.

Mission Australia chief executive James Toomey said the inflated rate made a huge difference for people struggling to afford housing, education and healthcare.

"We are perplexed the federal government is considering further cuts to income support payments in early 2021," he said.

"Now is the time to provide certainty beyond March and lock in a new, permanent and adequate rate of income support to restore dignity and so that everyone is included in the recovery ahead."

The government is also extending the income-free area, which allows welfare recipients to earn $300 per fortnight without having their payments docked.

The elevated partner taper rate and expanded eligibility for sole traders and the self-employed are also being extended.

Rebecca Gredley
(Australian Associated Press)

A decision on the rate of JobSeeker is expected to be made by early December, with the government hinting elevated levels will continue.

Unemployment Australians are receiving $250 more a fortnight than usual with the coronavirus supplement.

Social Services Minister Anne Ruston said a decision would be made based on economic conditions.

"If the evidence supports the continuation of elevated levels of support, they will be made available to Australians who need them," she told a Senate estimates hearing on Wednesday

"I think the prime minister made it very clear and provided certainty to Australians that on the 1st of January there is very likely to be continued elevated levels of support, recognising that we still are in a pandemic and we still don't know when this pandemic is going to end."

Prime Minister Scott Morrison on Tuesday gave his strongest indication yet the coronavirus supplement could be extended into next year.

"I have been clear and leant into it pretty heavily that people can expect the COVID supplement to be going forward beyond the end of this year," he told parliament.

"The precise level and the arrangements that sit around that are matters the government is considering now and will be doing so over the next few weeks."

The $250 a fortnight coronavirus supplement shrunk from $550 at the height of the pandemic.

The boost is due to end in December and the government would have to legislate a further extension.

Mr Morrison said a decision would be made before parliament rises for the year on December 10 so it can be stamped into law.

Without the coronavirus supplement, the dole payment would return to its pre-pandemic rate of $40 a day.

"Living without a job would be extremely difficult for any Australian," Senator Ruston conceded.

Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)

Australia's huge budget deficit and government debt topping $1 trillion for the first time doesn't seem to be troubling the world's major credit rating agencies, at least at this stage.

Treasurer Josh Frydenberg handed down a big-spending budget that forecasts a deficit of $213.7 billion in 2020/21, dwarfing the previous record of $85.3 billion in the last financial year.

It will see gross government debt reaching $1 trillion in 2021/22.

Australia is one of very few countries in the world to hold the top-tier triple-A rating from all three key credit rating agencies Standard & Poor's, Moody's Investors Service and Fitch Ratings.

Standard & Poor's saw no immediate threat to Australia's triple-A rating one of only 11 countries to hold its top-tier level.

"The budget confirms that the COVID-19 pandemic and stimulus packages will weigh on fiscal outcomes for years to come, with fiscal 2021 taking the brunt of the hit," S&P global ratings director Anthony Walker said.

"While debt is markedly higher than the past, servicing costs remain manageable, as the interest-rate environment will remain favourable for a number of years."

However, Australia retains a negative outlook reflecting its substantial fiscal deterioration given its rating, and risks remain tilted to the downside.

"We expect fiscal deficits to narrow from fiscal 2022 onwards, even with proposed tax reforms and new expenditure measures announced," Mr Walker said.

"Should this scenario not pan out as we expect, downward pressure on the rating may intensify."

Moody's Investors Service also noted the significant increase in Australia's debt levels to come, saying it was consistent with the nation's triple-A rating "at this point".

"Its experience with fiscal repair following past shocks and the likelihood of an extended period of low servicing costs mean that its debt remains manageable," Moody's vice president Martin Petch said in a statement.

The key risk was whether Australia would be able to meet the growth forecasts, including the forecast expansion in 2021/22.

The budget papers predict an economic growth rate of 4.75 per cent in the next financial year after a 1.5 per cent contraction in 2020/21.

Like S&P, Fitch also revised Australia's outlook to negative earlier this year to reflect the impact of the pandemic shock on the economy and public finances.

"Australia came into the coronavirus shock with fiscal space to counter the effects of the pandemic in the near term," Fitch said in a statement.

It says while the budget deficits are wider and debt is higher than previously anticipated, the medium-term debt trajectory is in line with its expectations.

"From a rating perspective, the medium-term debt trajectory is key," it says.

"Our future rating assessments will also assess the relative deterioration of Australia's fiscal position to its 'AAA' peers, whom are all seeing higher debt-to-GDP ratios."

Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)

There are signs that some Australian businesses that have been propped up by government support measures during the coronavirus pandemic are calling it a day.

New figures show the number of businesses entering into administration rose 11 per cent in September, the first increase since June.

At the same time, the number of business defaults also saw the first increase since May, up by 23 per cent, according to digital credit reporting agency, CreditorWatch.

CreditorWatch CEO Patrick Coghlan said the figures suggest that some of the so-called 'zombie' businesses that have been reliant on government support for survival are waking up to the reality of their situation and shutting up shop.

"The long term-trend is that zombie companies will continue to survive on government support and so the next six months are crucial in determining what position we start our economic recovery from.," he said.

"What we don't want to see is businesses that are doomed to fail continuing to operate and taking healthy companies down with them."

Victoria recorded a 23.8 per cent increase in business administrations in September, following a 49.3 per cent decrease the previous month.

Queensland also recorded a 24.1 per cent rise in business administrations last month, following a drop of 25.4 per cent in August.

However, NSW recorded a further 1.6 per cent decrease in September, building on the 34.3 per cent fall in August.