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Whether you’re nearing retirement or just starting to plan for the future, knowing how much super you need to retire can be challenging. What is considered to be a comfortable retirement income now may not be so in 10 or even 20 years’ time.
Before you start planning for your retirement, there are a few things you need to consider:
While everyone's circumstances will be a little different, the Association of Superannuation Funds of Australia (ASFA) has put together a guide known as the Retirement Standard that you could use to estimate how much you might need to live comfortably in retirement.
According to the ASFA Retirement Standard, a single person aged between 65 and 85, who is relatively healthy and owns their own home, would likely need a retirement income of about $44,146 per year to live a comfortable retirement. The potential comfortable retirement income for a couple in Australia is about $62,269 per year.2
You can find more details about the Retirement Standard on the ASFA website, including figures for incomes for comfortable and modest lifestyles, singles and couples, early years and the later years of retirement.
A comfortable lifestyle in Australia allows you to be involved in a broad range of leisure and recreation activities, have a good standard of living, and be able to afford things such as:
To work out whether the ASFA Retirement Standard is a good benchmark for your personal goals, check the detailed budget breakdowns on their website.
Not sure if you’re on track to retire comfortably? QSuper’s Retirement Income Calculator can show you what super balance you’re tracking towards and what your estimated retirement income will be.
The table below shows estimated costs of common weekly bills used in the ASFA Retirement Standard for a couple aged 65 – 85 living a comfortable retirement. Please note that all figures are rounded to the nearest dollar.*
*Please note this excludes alcohol or tobacco.
If you're already enjoying life after work, or plan on retiring in the next few years, it's a good idea to assess your current situation to estimate how long your retirement savings will last.
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1. Life expectancy based on the information derived from the medium mortality rate assumptions used by the Australian Bureau of Statistics in 3222.0 Population Projections, 2017 (base) to 2066 released 22 November 2019.
2. All figures quoted sourced from the ASFA Retirement Standard, December quarter 2019 report, https://www.superannuation.asn.au/resources/retirement-standard, accessed 20 February, 2020.
3. QInvest Limited (ABN 35 063 511 580, AFSL 238274) is a separate legal entity responsible for the financial services it provides. Advice fees may apply. Refer to the Financial Services Guide for more information.
Your retirement income stream should be flexible, so you aren’t blindsided by surprise costs when you’ve stopped working.
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