How much do you need?

Craig Hall explains how to calculate how much you need for retirement.

How much do you need?

It’s safe to say that the standard of living most people wish to achieve in retirement is one similar to or even better than that experienced prior to retirement. The reality for many is that their retirement income isn’t enough to maintain that standard of living.

So, how much is enough? According to the recent ‘Retirement Standard’ study by the Association of Superannuation Funds Australia (ASFA), to maintain a ‘comfortable’ standard of living in retirement, and assuming the home is owned, retirees would currently require an annual income of approximately $42,604 for singles and $58,364 for couples. At present the full Age Pension including supplements provides a single person with approximately $22,366 each year and $33,717 each year for couples. This is more in line with what the study says is required to maintain a ‘modest’ lifestyle. Therefore retirees without additional income to the Age Pension would struggle to maintain a ‘comfortable’ standard of living.  

Will you have enough? The cost of the lifestyle we consider ‘comfortable’ can differ, so conducting a comprehensive budget estimate, which reflects the retirement lifestyle desired, can show the income you need. Superannuation income streams are now a common and effective way to fund retirement. Using online superannuation and retirement income calculators help determine the amounts required to provide a desired retirement income, excluding any government income support. They can also calculate the contributions required to achieve that amount. Useful online tools such as these can be found on ASFA’s Super Guru website and ASIC’s MoneySmart website, as well as many of the superannuation fund websites.

How much can be contributed to superannuation? There are restrictions according to the person’s age, work status and the type of contribution. For Non-Concessional Contributions (NCC) no work test is needed for those under 65; however, for those aged 65 to 74, a work test of 40 hours in a 30-day period must be satisfied in the year of contribution. A Bring Forward rule allows people under 65 years on 1 July to contribute up to three times the NCC cap (currently $180,000 per year) in that financial year. If this amount is contributed, no further NCCs in the succeeding two financial years are allowed. The Bring Forward rule is not available to those aged 65 or above. NCCs are not permitted for those aged 75 and over. For Concessional Contributions, which include employer Superannuation Guarantee (SG) and Salary Sacrifice contributions, the current (temporary) cap for those aged 59 and over is $35,000 per annum. For more information on superannuation contributions, visit

If you are approaching retirement, it is prudent to look at your options for funding your retirement. Seek information from relevant government departments and consumer organisations, and consider obtaining professional advice to maximise your standard of living in retirement.

Craig Hall has worked in the financial services industry for approximately 25 years including 11 years of providing independent financial information to consumers.

Please note that the information in this article does not constitute or imply financial advice. It is recommended that you seek professional financial advice and/or seek clarification from any relevant government department or financial services provider before making financial decisions. 


    To make a comment, please register or login
    15th May 2015
    Dear Craig,
    You quote above;
    "and consider obtaining professional advice to maximise your standard of living in retirement."
    I did exactly as you suggest and had figures very similar to those quoted for a comfortable retirement at 55 in 2007. I am now 62 and my wife and I both receive full Centerlink benefits to survive and live very modestly today.
    What went wrong? I put my trust and life savings with St George Private Bank, the biggest mistake of my life. Why haven't they fronted the Inquiry? Who knows?
    I would like to hear from others who had a similar fate at the hands of St George Private, now Westpac BT.
    15th May 2015
    Did you understand what they were doing with your money and the risks involved? If not why not? What did you ask the advisor to do for you? The biggest problem I see on a regular basis is people investing in things they either don't understand and/or know the risks involved.

    Way back in the early 80's I think it was I had some money that I wanted to invest. So I met a bloke in a dark rented room who told me how well he could do with my money. Fortunately I only invested a little and it all worked out well. However I was very uneasy about the whole process because I didn't really understand what I was investing in or the risks. Fast forward to 1987 when I had a couple of managed funds that sold the best investments to meet redemption and kept the rubbish which was never to recover. Fortunately this was not a big disaster for me but by that time I knew that if I wanted to invest I just had to educate myself and know the real risks involved.

    Today I only invest in things I totally understand and now the risks involved. I do still get it wrong sometimes but with less than 5% invested in any one investment it is just a minor road bump along the financial road.
    15th May 2015
    Craig, I also did exactly as advised, and planned for a comfortable retirement. But the Government changed the rules and has now wiped out my plan entirely. There's really no point in planning when the goalposts are constantly moved.
    16th May 2015
    I'm with you Rainey. I took financial advice, did my own due diligence, and determined that I could retire following my retrenchment in my early 60s with the help of a Part Pension when I reached 65. Unfortunately, I qualified for part age pension in February this year after the change was made to count my Super in the Income Test. Now with the proposed change to the Asset Test I face a double whammy. If there is anything that you need to make long term plans for it's 20-25 years in retirement but with the governments constant dabbling there is no point because it's like building a house on sand.
    Tom Tank
    15th May 2015
    This is typical of so called financial experts in pushing the line that in retirement you would live at at least the level you did when working.
    My experience, after retiring at 67 following 52 years in the workforce, is that $30,000 to $35,000 income per year for my wife and I gives us a nice comfortable lifestyle. We do own our own house and run two cars, at this stage, and do trips away in out tent trailer.
    We do live modestly but comfortably without a expensive tastes.
    We, like so many of our vintage, did not have a lot of super when we retired but have made the most of it by by getting financial advice through an industry super fund for which we paid the adviser so got unbiased opinions and that is working well for us. We most certainly have not been ripped off.
    Like so many we did not have access to salary sacrificing or the extra-ordinary super contributions treatments of the well off, and my wife did lose a significant sum when her boss went belly up and hadn't paid the so-called compulsory super contributions into her super account for a number of years.
    15th May 2015
    Well Bonny, as a balanced investor who was willing to pay $11,500 in fees, with a bank I had been a customer of for 20 years, I would have thought the quality of financial advice would be about the best available. Unfortunately this was far from what I received. One good thing was that I recently uncovered the original SoA dated but unsigned in June 2007.I uncovered this document in October 2014.
    Back to my original question, did anyone else get burned by St George Private /Westpack BT around this time?
    15th May 2015
    The question is was it the quality of the advise or the GFC that caused your losses? Many people lost a lot of money because of the GFC and even those with hedging in place (very few as it's expensive) didn't fare as well as they thought they would.

    Maybe the advise you received was the best available? Remember without the GFC we would not be having this discussion.
    16th May 2015
    Hi Bonny, I think you are right. Perhaps the advice was good at the time but due to ever changing circumstances beyond all expectations such advice may eventually be poor advice. No, I an not a financial,advisor nor wish to defence them but the reality is as Rainey States, 'The goal posts are kept on being moved all the time. The GFC was a global event and little could have been done to avoid taking a financial hit. But it's most annoying when we 'plan' our financial future based upon local financial rules and the Government keeps on changing them. Playing the legitimate financial rules of today is tomorrow's despised 'rorter'. Who would have ever imagined that any one with assets that qualified them to claim Part Aged Pension would be considered to be 'wealthy'? It's a sad fact. It true, 'Today's good financial advice could turn out to be tomorrow's bad financial advice.' And sorry, but we ain't seen nothing yet re the financial rules governing retirees. There is a whole lot of grief coming the way of those who have saved for their retirement.
    15th May 2015
    Well Bonny, if you were advised to remain in a fixed term deposit with your life savings, because the market was too turbulent at that time, then advised by the same financial planner (employed by St George Private Bank) 3 months later, without any supervision, to enter the market as the turmoil had CEASED, or forfeit $4,500, what would you do?
    The financial planner then left, or was terminated exactly one month later? Yes, lets all blame the GFC and ignore the thousands of customers of the Commonwealth Bank who, because of a whistle-blower are rightly being compensated at last, although extremely slowly.
    Back to my original question, did anyone else get burned by St George Private /Westpac BT around this time?
    15th May 2015
    I was a CPA at that time and prepared many taxation returns with various funds and many where hammered at the time. I do remember some clients that had BT funds ending with nothing or very little although BT did have a lot of different type of investments.
    What you need to do is approach Westpac Bank for some compensation they have a contact email start their with your complaint (keep a copy of what you send).

    All banks are very aware of many problems they created and you may find some
    compensation there.If they do not react go personally to a the largest City branch and speak to someone about the problem.
    15th May 2015
    "retirees would currently require an annual income of approximately $42,604 for singles and $58,364 for couples. At present the full Age Pension including supplements provides a single person with approximately $22,366 each year and $33,717 each year for couples."

    So once again we are being told we need over $40,000 as a single and over $58,000 per couple for a comfortable retirement. Currently this requires an amount of over $800000 in super to generate that amount for a single person.

    So tell me again.... Who are the wealthy pensioners? Oh yes that's right. Those with their own home and $550,000 in assets.
    7th Dec 2015
    Having gone without holidays, restaurant dinners, nice clothes, new cars, expensive home, etc. etc. etc. for 50 years, we are supposed to now spend the savings we accrued through all that sacrifice, and through working overtime or two jobs, to save the taxpayer money - while those who enjoyed all those indulgences, or drank and gambled their money away, collect a full pension. That's what the LNP, Greens, and ACCOSS call ''fair''!
    8th Aug 2016
    Rainey, I would suggest you go on lovely holidays now and enjoy yourselves and spend down your money; if it gets below the asset level you can access a part or a full pension.

    15th May 2015
    Whatever your final figure, multiple it by two to be safe.
    15th May 2015
    Hi Robbo,
    St George Private was taken over by Westpac 2009. My platform was Asgard via St George Private in 2007. This is where my problem lies now as I am dealing with BT and the complaints area is far from helpful. Govt and ASIC and FOS are also most unhelpful.
    I have 3 years and many unanswered questions. If there is ever a Royal Commission I will be the first in the queue. You as a CPA may also wonder why Westpac has not appeared like all the other financial institutions at the Govt Financial Inquiry with their rogue financial planners? I cannot be the only customer with my retirement in ruin and now a burden to every hard working taxpayer?
    15th May 2015
    You have to keep at it try even harder, ring your local MP or Current affair they love this stuff. I am aware of many cases like yours.
    Even to this day I see people getting terrible advice by financial advisers and losing heaps.
    The quality of advisor is terrible I would never recommend anyone.
    My wifes cousin was an inspector in the police found a great advisor who said don"t take your 100 grand superannuation a year, invest in my fund and guess what he now has nothing and is on the pension.
    I wish you luck and don"t give up.
    15th May 2015
    Thanks Robbo,
    I will keep trying. Guess what? The local Federal MP wrote a letter on my behalf to the liaison man between Govt and the Banks. Guess what? Yes, he worked for Westpac and made no comment for 3 months till I asked if he had replied to the Ministerial letter?
    He then commented that as my case was now with FOS, he was unable to comment.
    I am getting very dizzy from this merry-go-round!
    This is why I am trying to find someone else burnt by Westpac.
    15th May 2015
    Robbo, I believe, is right about getting in touch with A Current Affair. Unfortunately, it takes a media program like this to expose the shysters when a government body should be handling the mess. I think ACA would have a field day with your situation and probably give the best and quickest result, rather than languishing in red tape for ages waiting for the political wheels to turn. The very best of luck with this. Don't give up.
    8th Aug 2016
    I am typing this from the weekend paper here in WA. It may be of interest for those about to retire. It is written by a well known financial advisor Nick Bruining.

    "A 65 year old home-owning couple with $250,000 in total savings will enjoy a full age pension.

    Drawing down at the rate of 5% per year, that generates a tax free retirement income of $46,752.
    That disregards the discounts on PBS drugs, local government charges, energy, water and a range of other things.

    A single person of that age with that amount is looking at a total income of $32,647.
    On January 1 that will jump to at least $35t,221.

    Allowing for inflation at 2% and funds earning just 4%, at 75 there is still $200,000 in capital left for both singles and couples.

    Total income would be about $43,000 (single) and $57,000 (couples)."

    I hope this is of help for some

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