How Much Money Do You Need To Retire In Australia?
- Jaxon King
- Sep 15
- 8 min read
How much do I need to retire in Australia? It’s a question I get asked a lot and probably one you’ve thought about yourself. Many Australians worry whether their retirement savings will be enough to meet their needs. There’s certainly been a lot of media coverage about this topic recently. With rising living costs, longer life expectancy and changing lifestyle expectations, how much is actually enough? And what can you do now to give yourself the best chance of a comfortable retirement? Let’s break down some of the things to consider.
How Much Do You Need To Retire Comfortably?
A comfortable retirement means having the financial resources to maintain your desired lifestyle without stress. The reality is there is no one-size-fits-all target when it comes to retirement savings. The figure will vary for everyone based on personal preferences and expectations. An important first step in shaping your retirement strategy is to define what ‘comfort’ means for you.
How Much Super Should I Have At 60?
An interesting first benchmark is the current median super balances for men and women aged 60-64. According to the recent update on super account balances by The Association of Superannuation Funds of Australia (ASFA) the average superannuation balance age 60, for men is $380,737 and for women it is $300,717.
However, the ASFA recommended super balance at 60 for a comfortable retirement is $469,000.
Many people have lower balances than this. However, even if your super balance is forecast to be in line with the ASFA recommendation, this doesn’t tell you how much you will actually need to live the lifestyle you aspire to. While your super balance is important, it’s one piece of the jigsaw.
Identifying your specific needs and goals is essential. Alongside factors such as travel plans, hobbies and lifestyle aspirations, you also need to factor healthcare into your planning. These will all influence your future financial requirements.
The Current ASFA Retirement Standard
If you’re not sure how much super you will need to sustain the lifestyle that you will want in retirement, there are a couple of key decisions you need to make to help you set some goals. ASFA has developed a benchmark for living costs in retirement. It provides a breakdown of estimated expenses for singles and couples, based on whether they expect to live a ‘modest’ or ‘comfortable’ lifestyle.
As at March 2025, assuming you currently own your own home, for a comfortable lifestyle singles would require $52,383 per year and couples would need $73,875 per year.
A comfortable lifestyle as defined in the ASFA benchmark, includes:
Top level private health insurance
Regular leisure activities including club memberships
Occasional restaurant meals & take aways
Utilities, home repairs and maintenance
Owning a reasonable car
and one overseas trip every seven years.
The retirement standard also highlights a lump sum amount needed to retire at 67 to fund this lifestyle. Assuming you draw down all your capital and receive the Age Pension, singles would require $595,000 and couples would need $690,000.
Retirement income that you would currently receive from the full Age Pension is $29,874 per year for singles and $45,037 per year for couples. This can cover a significant portion of basic living costs for many retirees.
Do I Have Enough To Retire?
Determining how much you need to retire involves a few key steps. Begin by estimating your annual expenses during retirement. Consider everything from housing and utilities to travel, eating out and hobbies. This forms the base of your retirement calculations.
Next, assess expected income sources such as Age Pension, superannuation, investments etc. Understanding these inflows helps you identify the gap between income and expenses. This gap represents the amount your savings will need to cover.
After that, account for inflation's impact on your savings. A sustainable withdrawal strategy is crucial. Typically, a 4.5% annual withdrawal rate is considered safe. Calculate how long your savings will last using this rate.
How Much Should I Save For Retirement?
Estimate annual expenses in retirement.
Subtract expected income from that total.
Adjust for inflation over time.
Determine a safe withdrawal rate.
Using this method, you can accurately calculate the savings needed for a comfortable retirement.
How Much Money Do I Need To Have To Retire on $60,000 or $100,000 Per Year?
I’ve pulled together a couple of scenarios that will give you an idea of what the required lump sum would be if you were aiming to retire on either $60,000 per year or $100,000 per year. This obviously depends on whether you are aiming for a comfortable or more ‘lavish’ lifestyle. It’s also based on using a 4.5% per annum withdrawal rate from your superannuation account, which is considered safe and sustainable.
Scenario A: Aiming To Retire on $60,000 Per Year
Breakdown:
Age Pension for a single person: $29,874 per year
Shortfall to fund: $30,126 per year
Required lump sum:
Using a safe withdrawal rate of 4.5% per annum from Super: $30,126 ÷ 0.045 = $670,000
This figure aligns closely with ASFA's comfortable retirement benchmarks. With good planning, $60,000 a year is realistic for many Australians.
Scenario B: Aiming To Retire on $100,000 Per Year
If you’re aiming for an even more comfortable retirement, this is what you would need to achieve $100,00 per year.
Breakdown:
Note: You are not likely to receive the Age Pension given the amount in Super needed.
Current limit for a couple, home owner is $1,247,500
$100,000 per year needed
Required lump sum:
$100,000 ÷ 0.045 = $2.22 million
This level of income requires a significantly higher savings goal. To achieve it, you will need to maximise super contributions, build non-super investments and possibly consider strategies like a downsizer contribution later in life.
A clear picture of your ideal retirement will guide the financial decisions you make today. It helps allocate resources effectively, ensuring that your post-retirement life is both fulfilling and secure. You can then tailor your investments and savings strategies to meet these personal goals. Let’s take a look at how to approach retirement planning.
How To Plan For Retirement
When it comes to how to plan for retirement there obviously are several factors that you need to consider. The most obvious first step in deciding what a comfortable income in retirement might look like is your expected living expenses. An accurate estimate of these costs is vital for setting realistic retirement targets.
However, as well as working out what your potential expenses might look like, there are a few other things to consider.
Key Factors That Influence Your Retirement Plan
It’s worth taking account of a few factors that typically get overlooked when planning your retirement:
Inflation: Plan for inflation to be between 2.5% to 3% per year.
Timeframe: Most Australians will need income for 20 to 25 years after retiring.
Fluctuating expenses: Your expenses will not be fixed each year. You’ll likely spend more in the early years of your retirement, less after that and potentially more if Aged Care is needed.
To determine a comfortable retirement, assess:
Desired lifestyle (frugal, comfortable or lavish)
Build in healthcare needs
Inflation rates
Leisure activities and hobbies
Understanding these factors helps you create a more precise retirement plan and adjust your savings strategy.
Strategies to Boost Your Retirement Savings
In Australia, superannuation is a cornerstone of retirement savings. Contributions are made by employers and individuals can supplement these with personal contributions.
It's essential to regularly review your superannuation fund's performance. Choosing the right fund can optimize your investment returns and lower fees. You also need to be aware of the current rules regarding making contributions to your super.
Current Super Contribution Rules
Employer Super Guarantee (SG): the current mandatory contribution employers must make is 12% of salary from July 2025
Concessional contributions cap: you can make $30,000 per year (salary sacrifice and SG combined) in concessional contribution without being subject to additional tax
Non-concessional contributions cap: the current limit for non-concessional contributions is $120,000 per year (with bring-forward rules being $360,000 for 3 years as a lump sum)
Non-Super Retirement Savings Strategies
Beyond superannuation, consider other savings options to bolster your retirement fund. These can include:
Investment portfolios such as shares, ETFs and term deposits
Lifetime income products or annuities
Downsizing or accessing home equity
Integrating these strategies with superannuation can provide a comprehensive and balanced approach. This ensures you have multiple income streams in retirement, enhancing your financial security and allowing for a more comfortable lifestyle.
Market volatility poses risks to your investment values. To mitigate these risks, consider diversifying your portfolio. A well-balanced approach reduces vulnerability to market fluctuations:
Include a mix of stocks, bonds and real estate
Regularly review and adjust your investments
Maintain a flexible financial strategy
Age Pension Eligibility
Age Pension is means-tested. How you structure your assets can help maintain access to part or full pension.
By proactively managing these risks, you can protect your retirement savings and enjoy peace of mind.
Building A Retirement Plan: Key Steps
Create a budget – understand where your money goes, and is likely to go when you retire. This helps you identify essential expenses versus lifestyle choices so you can prioritise accordingly.
Set your retirement income target – for example $60,000 p.a. Having a clear figure in mind allows you to measure progress and plan with confidence.
Subtract Age Pension (if eligible) from your goal to find your shortfall. This ensures you only focus on funding the portion of income that won’t be covered by government support.
Calculate your required lump sum using a safe drawdown rate (4.5%). This gives you a realistic estimate of how much capital you’ll need to generate sustainable income.
Maximise your super contributions using concessional and non-concessional caps. Taking advantage of tax-efficient contributions can significantly boost your retirement savings.
Build a diversified investment portfolio inside and outside super. Diversification helps reduce risk while providing growth opportunities over the long term.
Consolidate super accounts and reduce fees. Fewer accounts mean lower costs and a clearer view of your overall retirement position.
Plan withdrawals to maintain Age Pension eligibility. Structuring withdrawals carefully can maximise both your income and government entitlements.
Seek professional advice for tax, investment and estate planning. An experienced financial adviser can tailor strategies to your circumstances and keep you on track.
Why Professional Retirement Planning Advice Matters
Retirement planning is such an important process as it lays the groundwork for a stable future. A solid retirement plan offers a clear roadmap to achieving financial goals. It helps align your present business strategies with future personal needs. By planning ahead, you ensure a smooth transition, feeling confident in how much you need to retire comfortably.
The key benefits of retirement planning include:
Tailored strategies: Everyone’s situation is unique, and advice ensures you use the right mix of super and investments.
Regulatory knowledge: Superannuation rules and tax laws change regularly. Advice helps you stay compliant and efficient.
Accountability: Having a plan and regular reviews increases your chance of success.
Tax optimisation: Professional guidance can reduce unnecessary tax and preserve more of your retirement capital.
It also provides an opportunity to set realistic goals, ensuring you're on track. Planning also allows you to address potential challenges, such as healthcare costs and market changes. By starting early, you maximize your savings potential, giving you the peace of mind that you’ll be able to retire comfortably..
FAQs About Retirement Planning
How much super should I have at 60 for a comfortable retirement?
According to the Association of Superannuation Funds of Australia (ASFA) Super Detective tool, at age 60 you should have $469,000 in super to retire comfortably.
What’s the average Australian superannuation balance age 60?
According to the Association of Superannuation Funds of Australia (ASFA) the average superannuation balance age 60, for men is $380,737 and for women it is $300,717.
How much do you need to retire comfortably in Australia?
The current ASFA retirement standard cites a figure of $52,383 per year for singles and $73,875 per year for couples to achieve a comfortable retirement. However, this is dependent on how you define living comfortably.
How much do I need to retire on $60,000 a year in Australia?
To retire on an annual income of $60,000 per annum in Australia, you would require a lump sum amount of $670,000 based on a safe 4.5% per annum withdrawal rate from your superannuation account.
How much do I need to retire on $100,000 a year in Australia?
To retire on an annual income of $100,000 per annum in Australia, you would require a lump sum amount of $2.2 million based on a safe 4.5% per annum withdrawal rate from your superannuation account.
Start Planning Now
If you are aiming for $60,000 or $100,000 per year in retirement, do not leave it to chance.
At Scion Private Wealth we work with many Australians planning their retirement and looking for ways to optimise their superannuation and retirement savings.
Book a consultation with our retirement planning team today and discover how we can help you to achieve a comfortable retirement.
We can help you optimise super contributions, build tax-effective investment strategies and make the most of your retirement years. Contact us now and take control of your financial future.
