How should I budget for my retirement?

This is branded content for NGS Super.

Everyone has a picture in their head about the retirement they hope to have. But how can you make sure you'll have enough funds to pay for it?

Financial planner Cheryl Haines from NGS Super says the secret is in detailed preparation, working out what you want out of the next phase in your life, and how much it's going to cost.

"Retirement will lead to big changes in how you generate and use your income," she said. "You need to prepare now for the lifestyle you would like tomorrow."

The best starting point is to clarify what assets you have now, including where and how much super you have, what insurance policies you have, how much you owe on your mortgage (if any) and the current interest rate, said Ms Haines.

"Also take stock of your current savings accounts and look to consolidate smaller bank accounts so you can focus on your assets as a whole."

One of the biggest questions asked about super is the balance to aim for. Work out how much you're going to need by preparing a list of your current expenses.

"Call it a budget or whatever you like but write down every regular payment you need to pay, from groceries and fuel to private health cover and streaming services, gifts and magazines or how much you spend on that daily coffee," said Ms Haines.

For peace of mind, compare what you think you'll need with what the experts say. The ASFA Retirement Standard for example provides guidelines for a modest and comfortable lifestyle in retirement.

"When discussing annual income needs with clients, we compare your current expenditure with the standard'," said Ms Haines.

"Your individual income needs may be more or less than the standard however as a financial planner we use this as a starting point or an income goal to help determine if you're likely to achieve your income needs."

Once you know what your retirement income will be, ask yourself, 'Can I afford to live on that easily or will I struggle?'

"Prioritise your expenses," Ms Haines said. "But take into account that some of your current expenses will reduce in retirement like fuel costs or mortgage repayments, while others increase, like more travel or health-related expenses."

Making regular contributions to super either pre-tax via a salary sacrifice arrangement or after-tax voluntarily is a form of forced savings.

"Making extra contributions can help build your retirement nest egg and lead to a more enjoyable retirement lifestyle," Ms Haines said.

Are there any big purchases you know you'll need to make in retirement? A new car or a long-awaited overseas holiday?

"Often we recommend that while you're still earning income and have a regular cashflow, you try to save funds to help meet the cost of those larger expenses down the track," said Ms Haines.

"By setting funds aside for those one off expenses now it often means there's no need to draw large capital sums from your super savings in the future."

Take advantage of advice channels like complimentary limited super advice offered by most super funds, or seek out more personalised advice through experts like NGS Financial Planning.

This is one of a series of articles to help you prepare financially for the stages of life. Each month, an NGS Super expert answers readers' questions. Email to ASKNGS@ngssuper.com.au

The information provided is general information only and does not take into account your personal objectives, financial situation or needs. Before acting on this information or making an investment decision, consider your personal circumstances and read our Product Disclosure Statement and Target Market Determination at ngssuper.com.au

This is branded content prepared by NGS Super Pty Ltd ABN 46 0003 498 487 AFSL 233 154 the trustee of NGS Super ABN 73 549 180 515.