When you’re planning for your retirement, it’s great to start with a goal, and start as early as possible.

This ensures that you get the most benefit from compound interest on your savings, and can rest easy that you’ll be able to afford a comfortable retirement.

What actually is a comfortable retirement?

What constitutes a comfortable retirement is different for everyone, but a decent benchmark is the Association of Superannuation Funds of Australia’s (ASFA) retirement standard, which tallies up what it will cost for life’s essentials and a few other costs which make up a comfortable existence.

These include being able to afford top-level health insurance, reliable internet, owning and maintaining a reasonable car, and enjoying leisure activities and occasional travel.

The standard does assume however that the retiree takes a part pension from the age of 67, and owns their own home.

The standard is currently set at $56,166 per year for singles and $78,998 for couples.

The good news if you’re aiming for $1500 a week, or $78,000 per year in income from your retirement savings, is that this is comfortably above the retirement standard level for singles.

So what level of retirement savings would you need to generate this level of income?

If you were able to earn a 10% dividend yield on your portfolio, which I would argue is unlikely, you’d need superannuation savings of $780,000.

If you were earning just 5%, this would increase to $1.56 million.

I would argue that with the benefits of franking credits you’d be able to comfortably earn about 7.5% from dividends, meaning you’d need savings of $1.04 million.

Franking credits effectively pay a shareholder back a credit for the tax a company has already paid.

Given that retirees pay a 0% tax rate, this means the full 30%, for fully franked dividends, flows back to the shareholder.

In practical terms, a 5% dividend yield on a fully franked share becomes 7.14%.

Which shares deliver solid dividends?

In terms of companies that can deliver solid dividend yields, there are plenty to choose from.

Premier Investments Ltd (ASX: PMV) recently reported its full-year results. The retailer maintained its dividend, yielding 6.85%.

The Atlas Arteria Ltd (ASX: ALX) share price has slipped sharply recently, boosting its yield to 10.58%.

At the more blue-chip end, Westpac Banking Corporation (ASX: WBC) has a trailing yield of 4.39%, and Telstra Group Ltd (ASX: TLS) pays 4.36%.

As you can see there are plenty of options for shares which deliver a decent dividend yield.

And if you think your superannuation could use a top-up, it’s worth looking into non-concessional contributions, which can be a tax-effective way to increase your retirement savings.

The post How much is needed in superannuation for $1500 in weekly passive income? appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Premier Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Tuesday, the S&P/ASX 200 Index (ASX: XJO) was on form and pushed higher. The benchmark index rose 0.35% to 8,709.3 points

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 to fall

The Australian share market is expected to fall on Wednesday following a poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 5 points lower. In the United States, the Dow Jones fell 0.25%, the S&P 500 was down 0.15%, and the Nasdaq was 0.1% lower.

Oil prices tumble

ASX 200 energy shares including Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a difficult session on Wednesday after oil prices sank overnight. According to Bloomberg, the WTI crude oil price is down 4% to US$88.92 a barrel and the Brent crude oil price is down 2.6% to US$102.56 a barrel. Traders were selling oil after crude exports recovered at Saudi Arabia’s Red Sea ports.

REA Group shares upgraded

The team at Bell Potter has become a little more positive on REA Group Ltd (ASX: REA) shares following recent weakness. This morning, the broker has upgraded the property listings company’s shares to a hold rating with a $148.00 price target. It said: “We upgrade our recommendation to Hold, with the share price now trading in-line with our Target Price. Although we still see risk to FY27 volumes, we view the risk as broadly priced in and now wait to get clarity on looking through the cycle toward a recovery.”

Gold price rises

ASX 200 gold shares including Westgold Resources Ltd (ASX: WGX) and Northern Star Resources Ltd (ASX: NST) could have a good session on Wednesday after the gold price pushed higher. According to CNBC, the gold futures price is up 1.1% to US$4,213.8 an ounce. Traders were buying the dip on gold following a heavy decline.

Buy Codan shares

Bell Potter doesn’t think it is too late to buy Codan Ltd (ASX: CDA) shares despite their 24% rise on Tuesday. This morning, the broker has retained its buy rating with an improved price target of $73.00 (from $60.00). It said: “We forecast 39% Comms revenue growth in FY27e, implying 5% YoY in 2H27, and see scope for further upgrades if CDA successfully mitigates supply chain pressures given surging production of Group 2 UAS. CDA trades on 32x EBIT. Retain Buy.”

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

More reading

• Up 120%, is it too late to buy Codan shares?
• How much do I need in my superannuation to retire comfortably at age 67?
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Motley Fool contributor James Mickleboro has positions in REA Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

In Australia, most superannuation calculation models use age 67 as the primary baseline.

Age 67 is also the qualifying age for the Age Pension. 

At this point, it’s assumed most retirees will be drawing down, or about to draw down, on their super to finance their retirement lifestyle.

But how much do you need to have saved to be able to retire comfortably?

What does a comfortable retirement look like?

A comfortable retirement is considered one that gives individuals and couples a good standard of living and enough money to finance things like top-tier health insurance, regular social and leisure activities and some travel.

What does a comfortable retirement cost?

There are a couple of benchmarks to consider.

The Association of Superannuation Funds of Australia (ASFA) calculates that comfortable retirement will cost roughly $55,923 per year for single Australians. It’s expected to cost a couple living together closer to $78,566 per year combined.

Meanwhile, independent consumer advocacy group Super Consumers Australia (SCA) splits costs into three categories: low, medium and high spending. And they’re based on the actual spending data of Australian retirees rather than an estimated budget.

For the sake of comparison, we’ll assume a high budget gives the most ‘comfortable’ standard of living.

SCA calculates that retirement will cost roughly $61,100 per year for single Australians, and $88,920 per year for couples.

How much do I need in my superannuation to finance this type of retirement at age 67?

In order to have enough money for a comfortable retirement, ASFA calculates that at age 67, single Australians should have around $630,000 in their superannuation. Meanwhile, couples will need a balance closer to $730,000.

The calculation assumes you will only need to fund around 10 years of retirement, will be eligible to receive a part Age Pension, and that you own your home in full.

SCA calculates that you need a little more. Single Australians need a superannuation balance of $891,000, while couples need around $1.216 million. 

These calculations assume that about 29-34% of your retirement spending will be covered by the Age Pension and that you own your home outright.

How does your superannuation balance compare?

I don’t have enough. Is it too late to boost my superannuation balance?

Even at age 67, there are a few things you can do now which will help to increase your superannuation balance.

The first piece of advice is always to check that your super fund is performing well and that your investment strategy and risk profile match your own. 

Then, you want to add extra contributions wherever you can. Individuals can make concessional (before-tax) super contributions or after-tax payments within their annual limits. 

Government contributions might also be available depending on your personal circumstances.

If you’ve done all these things and you still don’t have enough to finance a comfortable retirement, another option is to continue working for a few more years. By delaying retirement into your early 70s you get an extra three or so years of income and compound growth.

The post How much do I need in my superannuation to retire comfortably at age 67? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• ASX 200 slips as RBA boosts interest rates to 15-year highs
• ASX 200 holds steady as investors brace for a big afternoon
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.