How much super will I need?

Most of us daydream about the day we finally finish work and retire. Whether you dream of cruising around the world, campervanning around Australia, or just pottering about in the garden and improving your golf skills, the magic question is: how much do you need to make your retirement dreams a reality?

According to the Association of Superannuation Funds of Australia’s Retirement Standard, to have a ‘comfortable’ retirement, single people will need $545,000 in retirement savings, and couples will need $640,000. You can use this guide to estimate how much money you’ll need to have a ‘comfortable’ or ‘modest’ retirement. See the box below for more information. The Standard is updated four times a year to take into consideration the rising price of items like food and utility bills, as well as changing lifestyle expectations and spending habits. The Standard includes the cost of things such as health, communication, clothing, travel and household goods.

  Comfortable retirement Modest retirement Age Pension
Single $42,893 a year $23,651 a year $20,555 a year *
Couple $58,922 a year $34,064 a year $30,989 a year *
One annual holiday in Australia. One or two short breaks in Australia near where you live each year Even shorter breaks or day trips in your own city
Regularly eat out at restaurants. Good range and quality of food Infrequently eat out at restaurants that have cheap food. Cheaper and less food than a ‘comfortable’ lifestyle standard Only club special meals or inexpensive takeaway

Owning a reasonable car Owning an older, less reliable car No car or, if you have a car, it will be a struggle to afford repairs
Afford bottled wine Afford cask wine Home brew beer or no alcohol at all
Good clothes Reasonable clothes Basic clothes
Afford regular hair cuts at a good hairdresser Afford regular hair cuts only at a basic salon or pensioner special day Less frequent hair cuts or getting a friend to cut your hair
Take part in a range of regular leisure activities Take part in one paid leisure activity infrequently. Some trips to the cinema Only taking part in no cost or very low cost leisure activities. Rare trips to the cinema
A range of electronic equipment Not much scope to run air conditioner Less heating in winter
Replace kitchen and bathroom over 20 years No budget for home improvements. Can do repairs, but can't replace kitchen or bathroom No budget to fix home problems like a leaky roof
Private health insurance Private health insurance No private health insurance

Figures from March Quarter 2016.

* Base rate before payment of supplements.

To find out how much money you’ll need to support the lifestyle you want in retirement, use the ASFA Retirement Standard tool. To work out how much money you’ll have when you retire, based on your current circumstances, use the Retirement projector calculator. For help saving more super, see the Grow your super section.

Many of us will spend more than a quarter of our life retired, as people are now living until an average age of 86 years (if you’re male) and 89 years (if you’re female). Life expectancy is expected to rise to 91 for males and 93 for females by 2050. So, you might need a lot more money for your retirement than you think. Unless you’re counting on a lotto win or growing your own personal money tree, super can help you enjoy your retired days by allowing you to maintain a good standard of living, which isn’t achievable by receiving just the Age Pension. For more information, see the Super and the Age Pension page.

Will your retirement live up to your daydreams? According to the Australian Bureau of Statistics, currently:

  • around 1.8 million people rely mainly on the Age Pension for their income in retirement
  • around 575,000 people rely mainly on superannuation income
  • in 2011-12, 50 per cent of retiree couples had an annual income of less than $28,260 a year
  • in 2011-12, 50 per cent of single retirees had an annual income of less than $21,700 a year.