From a budget lifestyle to a comfortable retirement, learn how much super you need to retire your way.
Thinking about retirement can be overwhelming As an Aussie planning to hang up the work boots at 65, I’ve spent countless hours trying to figure out exactly how much super I’ll need to live comfortably Let me tell you – it’s not as straightforward as you’d hope!
The truth is, there’s no magic number that works for everyone. Your retirement needs depend on your lifestyle, health, living situation and personal goals. But don’t stress! I’ve dug through the latest information from Australian Retirement Trust, Moneysmart, and other reliable sources to give you a comprehensive guide.
The Big Question: How Much Super is Enough?
According to the Association of Superannuation Funds of Australia (ASFA), as of March 2024 you’ll need approximately
- $595,000 in super savings for a comfortable retirement as a single person
- $690,000 in super savings for a comfortable retirement as a couple
These figures assume you:
- Own your home outright (no mortgage)
- Are in relatively good health
- Will receive some Age Pension
But what does “comfortable” actually mean? Let’s break it down
Understanding Different Retirement Lifestyles
There are generally three retirement lifestyle categories in Australia:
1. Budget Retirement (Age Pension Only)
If you retire with just the Age Pension and minimal super, you’ll live on a tight budget where:
- Home or car repairs will be limited or impossible
- You won’t have private health insurance
- Meals out will be limited to specials at clubs or cheap takeaway
2. Modest Retirement
With a modest lifestyle, you’ll have more than just the Age Pension, allowing for:
- Basic home repairs and a cheap car
- Basic private health insurance
- One annual holiday within Australia
3. Comfortable Retirement
This lifestyle lets you enjoy a wider range of activities and services:
- A decent car with ability to renovate your home
- Top-level private health insurance
- Regular restaurant dining and activities
Annual Spending in Retirement
ASFA provides these yearly spending figures based on March 2024 data:
For ages 65-84:
- Singles (modest): $32,915 per year
- Singles (comfortable): $51,630 per year
- Couples (modest): $47,387 per year
- Couples (comfortable): $72,663 per year
For ages 85+:
- Singles (modest): $30,669 per year
- Singles (comfortable): $48,075 per year
- Couples (modest): $43,891 per year
- Couples (comfortable): $67,050 per year
The Two-Thirds Rule
A common rule of thumb suggests you’ll need about two-thirds (67%) of your pre-retirement income to maintain your standard of living in retirement. This assumes you own your home outright.
For example, if you earn $90,000 annually before retirement, you’d aim for around $60,000 per year in retirement income.
How Long Will Your Money Need to Last?
If you retire at 65, you’ll likely need your super to last 20+ years. According to the Australian Bureau of Statistics (2022), the average Australian can expect to live well into their 80s.
This means planning for approximately 25 years of retirement if you stop working at 60-65. You can check your specific life expectancy using Australian Retirement Trust’s QSuper Life Expectancy Calculator.
Factors That Impact How Much Super You Need
1. Housing Situation
Whether you own your home, have a mortgage, or rent makes a HUGE difference to your retirement needs. Renters will need significantly more in retirement savings.
2. Health Status
Your health and potential medical costs greatly impact your retirement budget. Budget for unexpected medical expenses like hip replacements or other surgeries.
3. Aged Care Considerations
One of the biggest potential costs is the deposit for an aged care home. You might also need to budget for at-home aged care services.
4. Government Benefits
The Age Pension can supplement your retirement income. As of 2024, the maximum Age Pension rates are:
- Singles: Approximately $27,000 per year
- Couples: Approximately $40,500 per year (combined)
The amount you receive depends on your assets and income.
5. Other Income Sources
Consider other potential income streams like:
- Investment income
- Casual work
- Other savings
- Downsizing your home
Are You on Track? Super Balance By Age
While everyone’s situation is different, here’s a rough guide to see if you’re on track:
| Age | Suggested Super Balance |
|---|---|
| 30 | $61,000 |
| 40 | $154,000 |
| 50 | $271,000 |
| 60 | $430,000 |
Don’t panic if you’re behind! There are ways to boost your super.
Ways to Build Your Super Before Retirement
If your super balance isn’t where you want it to be, consider these strategies:
- Consolidate your super accounts to reduce fees
- Make extra contributions through:
- Salary sacrifice (pre-tax)
- Personal contributions (potentially tax-deductible)
- After-tax contributions
- Review your investment options to ensure they match your risk profile and timeframe
- Check your insurance within super to make sure you’re not paying for unnecessary coverage
Retirement Income Options
When you do retire at 65, Australian Retirement Trust offers several options:
- Retirement Income account: Regular payments from your super
- Transition to Retirement Income account: Regular payments while still working
- Lifetime Pension: Tax-free payments for the rest of your life
These can be mixed and matched to suit your needs.
What If I Can’t Save Enough?
If reaching these super targets seems impossible, don’t despair! You have options:
- Delay retirement: Working even a few extra years can significantly boost your super
- Work part-time: Reduce hours rather than stopping completely
- Downsize your home: Release equity to fund retirement
- Reassess your retirement lifestyle: Adjust expectations to what’s financially feasible
- Seek professional advice: A financial adviser can help find strategies specific to your situation
Real Talk: My Personal Experience
I’ve realized that planning for retirement isn’t just about hitting a specific number. It’s about understanding what kind of lifestyle I want and being realistic about costs.
At first, I was freaking out because my super was nowhere near the “comfortable” target. But after doing a detailed budget and realizing I don’t need all the bells and whistles of a “comfortable” retirement, I feel more confident. I’ve increased my contributions and am looking at working until 67 instead of 65.
The truth is, everyone’s retirement journey is different. Some of my friends plan to travel extensively and need more, while others are happy with a simpler lifestyle and require less.
Getting Personalized Advice
Since retirement planning is complex and everyone’s situation is unique, consider:
- Consulting with a financial adviser
- Using your super fund’s advice services (many offer free basic advice)
- Using online calculators and tools like the Moneysmart retirement planner
Final Thoughts
So, how much super do you need to retire at 65 in Australia? The simple answer is: it depends on the lifestyle you want.
At minimum, aim for the ASFA comfortable standard of $595,000 (single) or $690,000 (couple) if you want more than a basic lifestyle. But remember, these are just guidelines.
The most important step is to start planning now, regardless of your age or super balance. Even small increases to your contributions can make a big difference over time thanks to compound interest.
Have you checked your super balance lately? What steps are you taking to boost your retirement savings? Whatever your current situation, there’s always something you can do to improve your retirement outlook.
Remember, it’s never too early or too late to start planning for a better financial future!
How much will you spend in retirement?
Planning a yearly budget is another way to work out how much you need to retire. Or use ASFAs yearly spending figures as a guide. They assume youll retire at 65.
| 65–84 years ($ per year) | 85+ years ($ per year) | |
|---|---|---|
| Single | $32,915.00 for a modest retirement | $30,669.08 for a modest retirement |
| $51,630.00 for a comfortable retirement | $48,074.77 for a comfortable retirement | |
| Couple | $47,387.00 for a modest retirement | $43,890.54 for a modest retirement |
| $72,663.00 for a comfortable retirement | $67,049.86 for a comfortable retirement |
Source: ASFA Retirement Standard, based on the March 2024 quarter, if you own your home (no mortgage) and are relatively healthy.
The Retirement Standard says if youre on the Age Pension with no super, this means a budget lifestyle.
- Limited or no budget to repair home or car
- No private health insurance
- Specials at the RSL club or cheap takeaway meals
A modest lifestyle in Australia means you can afford basic activities. You have more money than just the Age Pension.
- Some money for home repairs, cheap car
- Basic private health insurance
- One holiday in Australia per year
A comfortable lifestyle in Australia means you can afford a wide range of activities and services.
- Decent car, and can renovate kitchen and bathroom
- Top level private health insurance
- Restaurant dining, regular activities
The Age Pension and other income
What Age Pension or other government benefits could you get? Think about income from investments or casual work, or other savings, too.
Be prepared for any big health costs that might come up when youre retired, such as a hip replacement or other surgery.
How Much Super Do You Need To Retire in Australia? 7 Key Factors To Consider
FAQ
How much Super do I need to retire?
The average superannuation balance needed at age 67 for a comfortable retirement is $690,000 for a couple and $595,000 for a single person, according to the latest figures from the Australian Government’s MoneySmart website and the Association of Super Funds of Australia (ASFA).
How much money do you need to retire in Australia?
According to the Association of Superannuation Funds of Australia (ASFA), a comfortable retirement today (as a single person) requires around $595,000 in super, and for couples, about $690,000. This assumes you own your home and are eligible for a partial Age Pension. But these are general figures.
How much superannuation do you need for a comfortable retirement?
The superannuation lump sum needed for a comfortable retirement at 67 is currently $690,000 for a couple. Canstar’s Research shows many Aussies may lack the funds necessary to retire comfortably. If your super balance isn’t on track, there are a few things you can do to help bump it up.
Is Australian superannuation ‘comfortable’ in retirement?
According to the latest APRA Quarterly superannuation figures, the average Aussie super balance is below what would be needed to support a ‘comfortable’ lifestyle in retirement.
How much superannuation should I have at any age?
While there is no specific amount of super you should have at any age, you can plan ahead and calculate how much superannuation you need for your retirement.
When can I access my superannuation in Australia?
Understanding when you can access your super is crucial when planning how much superannuation you need for retirement in Australia. You can typically access your super when you: For the Applebys, understanding that super could be accessed at age 60 by ceasing a form of employment was crucial to their retirement timeline planning.
How long will $500,000 last in retirement in Australia?
| Rate of Return | Estimated Age of Balance Depletion |
|---|---|
| 3% (Typically Bonds and Term Deposits) | 82 |
| 5% (Typically Mix of Bonds, TD Property and Shares) | 84 |
| 7% (Shares and Property) | 90 |
What is the average super balance at 65 in Australia?
| Age group | Male | Female |
|---|---|---|
| 60-64 | $380,737 | $300,717 |
| 65-69 | $428,533 | $379.483 |
| 70-74 | $474,898 | $422,348 |
| 75 or more | $487,525 | $416,279 |
Is $600000 in super enough to retire?
To enjoy a comfortable retirement, AFSA suggests that single people will need $595,000 in super savings at age 67, and couples will need $690,000. But your own individual goal will depend on your other income streams and personal situation.