How much you now need for a comfortable retirement

golden eggs in nest

Rising living costs mean more money worries – and a reappraisal of how much you need to save to deliver the comfortable retirement we all want.

So how much will be enough?

The Association of Superannuation Funds of Australia (ASFA) has released its latest estimates.

They are based on its calculations that couples aged around 65 will spend $69,691 per year for a comfortable retirement, while singles will spend $49,462.

YourLifeChoices estimates, published in the most recent Retirement Affordability Index and calculated by The Australia Institute, are higher.

February estimates were $87,200 and $49,792 for well-off couples and singles (self-funded homeowners) and $50,367 and $27,871 for constrained couples and singles (homeowners on a part or full Age Pension).

Estimated annual costs for cash-strapped couples and singles (retirees who rent and receive a full Age Pension) were $42,620 and $26,878. The full Age Pension with supplements is $41,704 per year for couples and $27,664 for singles. That cohort obviously needs to do some tough budgeting, especially given the rising cost of renting and the failure of Rent Assistance to keep pace.

ASFA itself admitted after a recent survey that a majority of respondents said they could not maintain their desired living standard in retirement on ASFA’s ‘comfortable’ budget.

So back to what you now need before you retire

ASFA says that because the growth in prices has outstripped wages, an adjustment to the lump sum is required. It calculates that the lump sum needed for a comfortable single retirement has increased by about 9 per cent from $545,000 to $595,000, and by about 7.8 per cent for a comfortable couple retirement from $640,000 to $690,000.

ASFA’s lump sum figures assume that retirement occurs at age 67 and that the lump sum will be fully spent by age 92. The calculations also assume that the Age Pension will be received as super balances decrease and that there will be investment earnings along the way.

They also assume that the Age Pension will increase over the medium to longer term by more than the increase in the consumer price index (CPI).

ASFA acknowledges that in recent years there has been no real increase in the Age Pension as growth in prices has been greater than the increase in average wages. That has “substantially raised” the amount of spending required to achieve either ASFA modest or comfortable retirements.

It says that investment returns alone are not enough to bridge the gap between the Age Pension and the required expenditure to support the comfortable standard.

What about self-funded retirees?

In 2023, an estimated two million Australians are either partly or fully self-funded in retirement. 

They’re considered self-funded if they are not eligible for any government support, including the Age Pension.

That said, some pre-retirees plan around deliberately spending or shedding assets in the years before retiring to help maximise their Age Pension entitlements. 

While there isn’t a specific superannuation savings benchmark for self-funded retirees, you may be able to get an estimate by using the formula below.

How much you’ll need in retirement – a basic formula

By working out your current annual expenses and multiplying that amount by the number of years that represent the difference between the age at which you retire and average life expectancy, you can calculate a savings amount that should see you through retirement.

So, let’s say you own your own home and have no debt and your expenses as a single are $32,500.  If you retired at age 67, you’d need a lump sum of $550,875 to last through your projected living years. Of course, this is a rough guide only, with inflation and other factors all having an impact.

What about inflation’s effect on retirement?

Inflation has been steadily increasing yet, despite a couple of pauses, many pundits say there will be more increases to come before we see reductions.

ASFA CEO Dr Martin Fahy says Australians will continue to face sharp price increases for essential goods and services. This may mean those planning retirement will put off those plans a little longer.

“While price increases have particularly impacted on the currently retired, the legislated 12 per cent SG (Superannuation Guarantee) will support the majority of Australians building adequate superannuation savings across their working lives to face future retirement costs with confidence,” he said.

Indeed, many older Australians are reassessing their retirement plans and their spending.

A Mozo survey found that Aussies had either done or were considered the following:

  • reducing everyday spending (73 per cent)
  • increasing work hours (18 per cent)
  • putting off retirement (18 per cent)
  • creating other sources of income (10 per cent).
  • reducing voluntary super contributions (2 per cent).

Dawn Thomas, senior financial adviser at Wealth Designers, offers the following guidance:

1. Get clear on your retirement goals. While planning for the next 30 to 40 years can seem daunting, it’s vital to make decisions now about how you plan to financially tackle them.

2. Pay attention to your super. Get engaged with what’s actually happening with your super: how your returns have been performing, how your fees stack up, and if everything’s in the same place.

3. Get on top of your household budget. Knowing which expenses are eating into your balance sheet can make a huge difference. Consider downloading a budget app to help.

4. Make voluntary contributions. Depending on your circumstances, topping up your super fund can be an effective way to grow your nest egg.

5. Engage a financial adviser. The right adviser can help you with custom insight, advice and workarounds that work for your specific situation

If you are planning retirement and you’re stressed about your savings, taking even small steps to make changes that can add up to a better balance may help you feel more in control.

Are you concerned about building a nest egg of the size now deemed necessary for a comfortable retirement? Why not share your thoughts in the comments section below?

Updated 11 July 2023 to include figures from the latest Retirement Affordability Index table, additional information for self-funded retirees and a basic formula for how much you’ll need in retirement.

Also read: Everything you need to know before making the decision to retire

Written by Janelle Ward

Energetic and skilled editor and writer with expert knowledge of retirement, retirement income, superannuation and retirement planning.


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  1. i haven`t got any super, i never recieved the super supposedly paid in by my employer at the time.–back in about the year 2000, it was paid into host plus and i worked the ( the burswood casino) but i have since relied solely on then the disability pension, and now the age pension.
    which by the time all expenses are paid per fortnight / month, there`s not a lot left.

    but unless i am a super retiree, or a ” low income ” worker i get to be ignored.

  2. Hey, I think the government should look at the amount of years a person had worked and the amount of TAX paid by that person and then calculate the amount of pension that that person deserves, and NOT one sum for all. Think about this ! I think that it would get more people looking to get a job if they new that they would get more money in retirement then if they did nothing.

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