Retirement is a milestone that many doctors look forward to after years of demanding work, long hours, and patient care. But doctors often underestimate just how much they’ll need to maintain their lifestyle after they hang up the stethoscope, and even the most financially savvy can be caught off guard.
How much is “enough”?
According to the Association of Superannuation Funds of Australia (ASFA), a comfortable retirement today costs around $690,000 total for a couple and $595,000 for a single person aged about 67. These figures assume you own your home outright, are in relatively good health and receive a partial Age Pension.
However, for most doctors accustomed to a higher standard of living, earning well above the national average and often supporting children through tertiary education or maintaining multiple properties, those benchmarks fall well short.
If your current household and lifestyle expenses sit around $150,000 per year, maintaining a similar standard of living in retirement could require a super balance of up to $3 million by the time you stop working.
While that may sound daunting, the good news is that time and strategy are on your side, especially if you start planning early.
Why planning early matters
The two decades leading up to retirement is your financial “sweet spot”. It’s when your earning power will likely be the highest and when investment decisions can have the biggest impact on your long-term wealth. By fine-tuning your portfolio, reducing inefficient debt, and strategically allocating assets, you can set yourself up for a stronger, more resilient financial future.
For example, a 45-year-old investor who adds an extra $20,000 a year to a diversified portfolio earning 6 per cent annually could grow their investment by more than $700,000 by age 65. That’s the power of compounding – consistent, disciplined investing today that builds meaningful long-term value.
The Division 296 conversation
In recent Superannuation news, Division 296 has been making headlines. This proposed legislation applies an additional 15 per cent tax to earnings on super balances above $3 million (and 25 per cent above $10 million).
The good news? The government has recently revised some of the rules. Unrealised gains will no longer be taxed, and the thresholds will now be indexed, helping reduce future bracket creep.
Still, if your balance is approaching the $3 million mark, it’s important to review your structures, particularly whether additional wealth should be invested outside of super to maintain flexibility and minimise tax exposure.
Building comfort and clarity in your retirement
Ultimately, the “right” number is personal. It depends on your desired lifestyle, expected expenses, and how long you plan for your savings to last. But one thing is certain, the earlier you start planning, the more control you’ll have over your financial future.
Our trusted advisors specialise in helping medical professionals map out clear, personalised retirement strategies. Together, we’ll help you achieve the financial comfort and clarity you deserve in your post-work years.
Speak to a trusted advisor today on 1800 988 522 or go to www.cutcher.com.au/contact to start building your roadmap to retirement.
Wade is the head of the Investment Services division at Cutcher & Neale and has over 15 years of industry experience in accounting and investment advisory roles.
Wade guides his division on the belief that investment portfolios should be built on transparency and flexibility. His expertise focuses on direct portfolio exposure to both Australian and Global Investment markets.
