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. 

Written by YourLifeChoices Writers

YourLifeChoices' team of writers specialise in content that helps Australian over-50s make better decisions about wealth, health, travel and life. It's all in the name. For 22 years, we've been helping older Australians live their best lives.

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