How long will my super last in retirement?

No matter how old you are, it’s important to ask how to make your super last in your retirement.

Having a healthy super balance could play a deciding factor in what sort of retirement lifestyle you will have in the future.

With life expectancy rising¹, and cost of living increases starting to bite, you may need more money for retirement than you think.

Taking time out to identify any gaps now means you may be able to explore different options to boost your super and achieve a more comfortable retirement.

Q: How much super do I need to retire comfortably?

A: The Association of Superannuation Funds of Australia (ASFA) has created a Retirement Standard to help give people a clearer understanding of what retirement lifestyle their savings will give them.

It is updated quarterly to reflect inflation and provides detailed budgets of what singles and couples would need to spend to support their chosen lifestyle.

For a ‘comfortable’ retirement, ASFA’s June quarter 2024 estimate is that single people will need $52,085 in retirement savings per year, and couples will need about $73,337 per year.²

A comfortable retirement may include:

• A range of leisure activities
• A reasonable car
• Good clothes
• Eating out regularly in restaurants
• One annual holiday or occasional international trips
• Money for home repairs and utilities.

Q: How much super do I need to retire modestly?

A: To retire modestly, the ASFA June 2024 estimate is that single people aged about 65 will need about $33,134 a year and couples will need about $47,731, per year.²

A modest retirement may include:

• Infrequent leisure activities on occasions (e.g. going to the movies)
• A basic or cheap car
• Reasonable clothes
• Occasional takeaway or modest restaurants
• One or two short local holidays
• Limited budget for utilities.

With a modest retirement lifestyle, you can afford all the essentials with the occasional small splurge, but it will require you to be more careful with your money.

Q: What happens if I'm renting in retirement?

A: As a result of circumstance or choice, you may not own a home in retirement. This can present some challenges for retirees, as this will increase your lifestyle costs..

Consider speaking to a financial advisor to assess how renting may affect your lifestyle in retirement.³

Q: What if my super balance is less than I expected?

A: If your super balance doesn’t match your expectations, there are still plenty of things you can do to help grow your super for retirement.

• Consolidate your super accounts

You may have worked multiple jobs and have super sitting in a variety of super funds. Finding and consolidating lost super into one account could help you save money on fees and your retirement funds grow.⁴ Consolidating your super can be quick and easy to do.

• Salary sacrifice

Another way to help grow your super balance is to salary sacrifice. This means a portion of your pre-tax salary goes directly to your super account. Salary sacrifice benefits could also have potential tax benefits, all while contributing to your super. Salary sacrifice isn’t for everyone, so it’s important to learn if it’s a suitable option for you. Find out more by downloading the Personal Contributions Guide (pdf).

• Make extra after-tax contributions

Even small amounts from your after-tax pay each week or month may also make a difference to your savings, and you may be eligible to claim a tax deduction or for the government co-contribution. A voluntary after-tax super contribution is money you choose to pay into your super fund from your after-tax income or savings and is different from salary sacrificing, which happens before your income is taxed. Be aware there are limits, or contribution caps, on how much extra you can put into your super.

• Review your investment strategy

Your super is an investment in your future. How you choose to invest your super can have a big impact on the amount you have to spend in retirement. As a member with us, you can choose from a wide range of investment options. You can choose just one, or mix a few together.

1. Australian Bureau of Statistics, Life expectancy, 2020 - 2022 | Australian Bureau of Statistics (abs.gov.au), accessed 15 October 2024.
2. ASFA Retirement Standard, June quarter 2024, assuming you own your home (no mortgage) and are relatively healthy. The ASFA Retirement Standard - ASFA The Voice of Superannuation since 1962, accessed 15 October 2024.
3. Any advice given is by representatives of ART Financial Advice Pty Ltd (ABN 50 087 154 818, AFSL 227867), a separate legal entity wholly owned by the Trustee as an asset of Australian Retirement Trust. As representatives, they may recommend ART products from time to time. So read the relevant Financial Services Guide at art.com.au/fsg to tell you about that advice and how they’re paid.