How Much Superannuation Do I Need To Retire Comfortably?

The realisation of never working another day and relying on your super to provide you with an income for the remainder of your life can be daunting.

Well, let’s put your mind at ease and show you exactly how much money you need to retire comfortably in Australia.

How Much Super Do I Need To Retire?

How much is enough for retirement in Australia? It’s quite subjective, isn’t it? Thankfully, I’m going to keep it simple to give you a rough idea.

We all have different needs, desires and retirement goals. Or do we? Over the years that I’ve been helping people with their retirement plans, one thing remains constant: we’re not actually as unique as we think we are! Well, that’s a lie; we are all unique beings, but our retirement income goals are largely the same.

We all want somewhere between $50,000 – $70,000 per year in retirement income, plus around $5,000 – $20,000 per year for travel. Does that sound about right? On top of that, some of us want to do a few home renovations in the first few years of retirement and some of us are considering downsizing our home at some point in retirement.

Related article: Retirement Planning Strategies

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In Australia, the amount of money you need to retire will usually range between $70,000 and around $1,500,000 depending on a number of factors, including:

  •  Whether you live a modest, comfortable or a-little-bit-lavish lifestyle;
  • The age you intend on retiring at (determines how many years your investments need to provide an income for);
  • Whether you are single or a member of a couple; and
  • Expected investment returns

Related article: Average Retirement Income Australia

How Much Super Do I Need To Retire Comfortably in Australia?

A comfortable retirement income in Australia is defined as a debt-free, healthy retiree being involved in a broad range of leisure and recreational activities, holding private health insurance cover, having a good standard of living with a reasonable car, nice clothes and regular travel.

A modest retirement lifestyle is having basic needs a little bit above just relying solely on the Age Pension.

Read more: How Much Do I Need To Retire On $100000 A Year?

The table below compares the annual budgets for households of both modest and comfortable living standards for 67-year olds:

Modest LifestyleComfortable Lifestyle
SingleCoupleSingleCouple
Expenses per year$31,867$45,947$50,207$70,806

Source: AFSA Retirement Standard

Based on this, the amount of superannuation you need for a modest retirement at age 67 is:

Super Balance Required At Retirement
Modest Lifestyle (couple)$100,000
Modest Lifestyle (single)$100,000

Source: AFSA Retirement Standard

And the amount of superannuation you need to retire comfortably at age 67 is:

Super Balance Required At Retirement
Comfortable Lifestyle (couple)$690,000 (combined)
Comfortable Lifestyle (single)$595,000

Source: AFSA Retirement Standard

Related article: How Long Will My Savings Last?

How Much Super Do I Need To Retire at 60?

Not everyone wants to wait until age 65 to retire. Retiring sooner will require you to have more in super, as your super balance will need to provide you with an income for longer. 

Here is how much super you will need to retire at age 60:

Moderate LifestyleComfortable Lifestyle
SingleCoupleSingleCouple
Super Balance at 60$290,000$370,000$890,000$1,110,000

Calculated using AFSA Retirement figures, plus five additional years using the same assumptions.

As you can see, the amount of super required to retire at age 60 is considerably more than retiring at age 67. This is because your super alone needs to cover your expenses, with no assistance from the Age Pension until age 67.

Related article: What Age Can I Retire In Australia?

How Much Super Do I Need To Retire at 55?

The amount of super you need to retire at 55 is $1.035 Million for a comfortable retirement or $380,000 for a modest lifestyle, if you are single. If you are a couple, you need $1.32 million, combined, for a comfortable lifestyle and $505,000, combined, for a modest lifestyle.

Accessing your super at age 55 is no longer possible. It’s important to remember that you generally need to have met your superannuation preservation age prior to being able to access any part of your super.

Also, if you plan on starting an income stream with your super, the income will usually only be received tax-free if you are over age 60.

Your preservation age and potential tax on income under age 60 are two factors that really need to be considered if you plan on retiring and accessing your super prior to age 60.

It is likely that you will need to use your non-superannuation investments to cover your expenses prior to reaching age 60, if you plan on retiring under age 60.

Related article: How to Plan For Retirement?

Here is how much super you will need to retire at age 55:

Modest LifestyleComfortable Lifestyle
SingleCoupleSingleCouple
Super Balance at 55$380,000$505,000$1,035,000$1,320,000

Calculated using AFSA Retirement figures, plus ten additional years using the same assumptions – not taking into account potential income tax.

How Much Super Is Enough?

So how much super do you need to retire? Are you content with a modest retirement, would you prefer a comfortable retirement, or are you planning on living it up?

The first step is to check your superannuation preservation age, so that you know what age you can access your super. Then, decide on what age you would like to retire, how much you need between now and being able to access your super and what your super balance needs to be once you can access it.

Our financial planning firm, Toro Wealth, specialises solely in helping 50 to 70 year olds optimise their financial position in the lead up to retirement. If you’re interested in learning more about our service and cost, click here.

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Hi, I hope you enjoyed reading this article.

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Thanks for stopping by - Chris