It’s always nice to have a target in mind for how much money you, as a single person, need to retire. It gives you something to work towards and lets you know whether you’re on or off-track.
Let’s take a look at a few examples of how much you need to retire depending on your age and whether you are looking for a comfortable retirement or one that’s a little more modest.
How Much Does a Single Person Need to Retire
A single person needs $595,000 for a comfortable retirement and $100,000 for a modest retirement from age 67 until age 95. A single person achieves a comfortable retirement by meeting expenses of $50,000 p.a. and a modest retirement by meeting expenses of $32,000 p.a.
A comfortable retirement is defined by AFSA as allowing you to maintain a good standard of living; including daily essentials such as groceries, transport and home repairs, plus private health insurances, a range of exercise and leisure activities and the occasional restaurant meal. It also allows you to remain connected to family and friends through technology and in-person. A comfortable retirement assumes one domestic trip per year and one overseas holiday every seven years.
A modest retirement is defined as a retirement lifestyle that is slightly above the Age Pension and allows retirees to afford basic health insurance and infrequent exercise, leisure and social activities with family and friends.
Both types of retirement lifestyles assume that you own your home outright and are relatively healthy. All calculations assume inflation of 3% p.a. and a net average investment return of 6% p.a.
How Much Does a Single Person Need to Retire Comfortably?
The amount a single person needs to retire comfortably is around $500,000. However, this depends on the age you would like to retire and how long you would like to achieve the desired retirement income.
To give you a bit of an idea, I have performed some calculations showing how much a single person needs based on the age of retirement to cover expenses until age 95.
How Much Money Does a Single Person Need to Retire at 55
The amount of money a single person needs to retire at age 55 is $1,035,000 for a comfortable retirement income of $50,000 p.a. or $380,000 for a modest retirement income of $32,000 p.a.
How Much Money Does a Single Person Need to Retire at 60
The amount of money a single person needs to retire at age 60 is $890,000 for a comfortable retirement income of $50,000 p.a. or $290,000 for a modest retirement income of $32,000 p.a.
How Much Money Does a Single Person Need to Retire at 65
The amount of money a single person needs to retire at age 65 is $693,000 for a comfortable retirement income of $50,000 p.a. or $162,000 for a modest retirement income of $32,000 p.a.
What Happens To Your Super When You Retire?
When you retire, you have a number of options regarding what happens to your super. Understanding what happens to super when you retire is important in determining when you can afford to retire and how much money you need for retirement. This video explains what happens with your super when you retire.
Retirement Planning Advice
Getting retirement planning advice from the right person can ensure you are doing everything you should be doing prior to retirement, so that your retirement plan is optimised, your super contribution strategy is on-point and your super fund and investment options are appropriate for your needs. If you do not already have a trusted financial adviser who specialises solely in retirement planning advice, feel free to meet our team and get in touch with us here. Our small team provides affordable retirement planning advice Australia-wide.
Frequently Asked Questions
Here are some common questions asked about how much a single needs to retire.
How Much Does the Average Australian Retire With?
The average Australian retires with approximately $360,000. Specifically, the average male Australian retires with $390,000 and the average female retires with $330,000.
Can I Retire at 60 with $500,000?
Yes, you can retire at 60 with $500,000. This is how much a single person should have saved for retirement in order to achieve a retirement income of $41,000 per year until age 95.
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