How Much Super Do I Need to Retire?

Retirement may seem like it will never really arrive, that it’s a distant dream on the horizon. But for most people there will come a time when you can finally stop working and retire.

And when you do, you want to be able to know that you are financially secure. So, how much super is enough to be able to comfortably retire?

How much super do I need as a single or couple?

Australia’s super industry body, the Association of Superannuation Funds of Australia (ASFA), calculated in 2016 that the average superannuation balance required to achieve a comfortable retirement would be $640,000 for couples and $545,000 for singles. The calculation covers expenses such as private health insurance, home repairs and renovations, food and leisure activities.

How much super you need will depend on the standard of living you want to maintain. In short, it depends on what needs you have, and what extra perks you would like to be able to afford during your retirement.

ASFA has estimated the yearly income a retiree would need to retire ‘modestly’ or ‘comfortably’. These figures assume that the retiree owns their own home outright and is relatively healthy. See below:

Budgets for various households and living standards for those aged around 65 (June quarter 2018)
Modest lifestyle Comfortable lifestyle
Single Couple Single Couple
$27,425 $39,442 $42,953 $60,604
Source: ASFA. Figures assume retirees own their home and relate to expenditure by household which can be greater than household income after tax where there is a drawdown on capital over the retirement period. Single calculations based on female figures.

ASFA’s figures indicate that for a modest retirement at age 65, a single person would need $27,425 per year and a couple would need $39,442 per year.

According to ASFA’s definition, a modest retirement is more comfortable than the Age Pension and might enable you to enjoy basic activities, like short holidays near where you live or occasionally eating out.

What is a comfortable retirement?

For a comfortable retirement at age 65, ASFA estimates that a single person would need around $42,953 a year and a couple would need $60,604 a year.

ASFA defines a comfortable retirement as when a retiree can afford to be involved in a range of recreational activities, buy household goods, top level private health insurance, a mid-range car, electronic equipment and travel occasionally.

A comfortable retirement might allow you to eat out more regularly, travel further and enjoy more luxuries than would be feasible in a modest retirement.

Does the retirement standard change as you age?

ASFA’s calculations suggest the income needed when you reach 85 years old compared to when your 65 years old will be slightly different.

A modest retirement for a 65-year-old requires $27,425 a year for a single and $39,442 a year for a couple, while a modest retirement for an 85-year-old requires $25,927 a year for a single and $37,004 for a couple, ASFA says.

It’s also all about what feels ‘comfortable’ to you. It’s hard to say what super balance would be required in total because a retiree might also receive the Age Pension.

A comfortable retirement of 20 years at $60,843 per year (for a couple) might require a total of over $1.2 million in super.

However, that figure doesn’t take into account that the cost of living typically lowers progressively from 65 to 85 years of age, so it is not a completely realistic estimate of how much is needed.

A good rule of thumb if you’re earning above the average is, according to ASIC’s MoneySmart, to assume that you will need two-thirds of your annual income now to maintain the same standard of living.

You can check what budget you will likely need in retirement with the Canstar Retirement Planner Calculator.

Canstar's Retirement Planner Calculator

The more you can grow your super while working, the more comfortable of a lifestyle you can lead when you retire. Picking the right fund to grow your super is important because over the years small differences in fees and returns can make a large difference to the amount you will retire with.

Compare Super Funds with Canstar

Do Australians rely on the Age Pension?

On average, Australians receive the Age Pension over a longer timeframe than ever before.

When Australia’s Age Pension was introduced in 1909, the nation’s 4.2 million people had an average life expectancy of just 55 years, and few people were expected to reach the Age Pension at 60 (women) or 65 (men).

In 2018, the Age Pension is still available at 65 – 67 years, while our life expectancy at birth is more than 80 years for both men and women, according to the Australian Institute of Health and Welfare.

For more information on how the Age Pension in Australia works, read our explanation here.

What is the average superannuation balance at retirement?

According to the Australian Bureau of Statistics (ABS), during the years of 2015 and 2016, the mean superannuation balance for people aged 55-64 was $310,145 for men and $196,409 for women. The table below displays the ABS’s mean superannuation balances for all age groups and genders in 2015-16:

Superannuation balance by age group (years) Males ($) Females ($)
15–24
Mean 6,633 5,646
Median 2,500 2,200
25–34
Mean 38,243 32,023
Median 26,000 23,006
35–44
Mean 91,818 65,763
Median 65,000 44,310
45–54
Mean 179,440 114,268
Median 110,000 62,235
55–64
Mean 310,145 196,409
Median 166,339 96,011
65–69
Mean 411,330 320,895
Median 187,187 175,786
70 and over
Mean 370,086 268,068
Median 164,109 145,000
Total superannuation balance
Mean 153,020 101,652
Median 60,000 39,000

Source: ABS, Gender Indicators

You can work out how additional contributions to your super could boost your balance using the Canstar Superannuation Calculator:

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The bottom line on super needs

The requirements for a ‘modest retirement’ could be achievable for the average Australian who has some super and receives a part-pension.

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