How much do you really need to retire?

It was once widely touted that a couple needed $1 million to retire comfortably. But that figure is now just as widely disclaimed. So how much do you need?

The Association of Superannuation Funds of Australia (ASFA) says a single homeowner needs $545,000 in super at retirement and couple homeowners need $640,000 to maintain a ‘comfortable’ (not extravagant) lifestyle.

But analysis from Super Consumers Australia (SCA), using data sourced from the Australian Bureau of Statistics (ABS), says those figures may have been greatly exaggerated.

Read: Five ways you could increase your retirement income

The SCA says that a single homeowner aged 55 to 59 who plans to spend $55,000 per year in retirement (which the SCA considers a ‘high’ level of spending) would need to have $745,000 in super by retirement.

But a single homeowner who aims to spend only around $44,000 per year (similar to AFSA’s ‘comfortable’ retirement) would need to save only $301,000 by retirement age. For a frugal lifestyle in retirement with an annual spend of $34,000, the magic figure according to the SCA is just $88,000.

For homeowning couples aged 55-59, the targets are $1,003,000 (for an annual spend of $81,000), $402,000 (annual spend $64,000) and $111,000 (annual spend $48,000).

“Having credible targets, based on actual spending, means people can confidently spend and get on with enjoying their retirement,” said Super Consumers Australia director Xavier O’Halloran.

Read: No one-size-fits-all when it comes to retirement income

He noted that the $1 million figure often bandied about is really only applicable to people with high spending patterns and says the suggestion that all retirees will need that much is harmful.

“That can lead to over-saving, it can lead to them making sacrifices during their working life that they don’t need to make, if they just want to maintain their standard of living,” he says.

“It also sees some people in that higher bracket pass away with a significant amount of savings still left over, that they haven’t been able to make the most of during their lives, which I think is a shame.”

Both the SCA and AFSA targets assume the retirees own their home outright and aren’t making mortgage or rent payments. They also assume the retirees are receiving at least a part Age Pension.

Read: Where you live can indicate when you’ll retire

Financial expert Scott Pape, also known as ‘The Barefoot Investor’, says he has issues with the AFSA figures and feel they discourage many people from trying to save extra for their retirement.

“There are two problems with this [the AFSA figure],” he says.

“First, it’s out of reach for most people. The ABS says that the median super balance on retirement is $250,000 for men and $200,000 for women. So for an average working Aussie, why bother trying?”

AFSA CEO Dr Martin Fahy defends his organisation’s figures, telling the Australian Financial Review the standard “resonates with retirees and their lived experience”.

“At a time of rising inflation and year-on-year increases in healthcare and aged care costs, Australians are obviously worried about having enough to meet their retirement needs,” he says.

YourLifeChoices’ latest Retirement Affordability Index estimates the following annual expenditures for four homeowner retiree cohorts: $81,435 (couples with private income), $47,096 (couples who also receive an Age Pension), $46,522 (singles with private income) and $25,963 (singles who also receive an Age Pension).

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Brad Lockyer
Brad Lockyer
Brad has deep knowledge of retirement income, including Age Pension and other government entitlements, as well as health, money and lifestyle issues facing older Australians. Keen interests in current affairs, politics, sport and entertainment. Digital media professional with more than 10 years experience in the industry.


  1. Phew. I definitely don’t have $1m, but I might be able to retire in some sort of comfort. There was no trick to it for me, I simply always elected to put in extra super from my pay, mostly to fill the working gap I took when I had my kids. I’m still working and I’d love to hear other people’s tips and tricks to boost super if you have them.

  2. Well all this is easy anwser – Do not have any super or rental and only your pension well I am currently overseas living with reduced pension to minimum and able to travel back every 6 to 8 month and stay with my kids – With reduced pension in almost any asian country you can live like a king so if you struguling and living like street dog get the hell out and live overseas and just come back for a visit ….. keep your account in Australia for security and just transfer to your local whatever U need or use your ATM debit card and get local currency – I live with 926 AU$ a forthnigth – pay rent got a new car fridge full with everything I want enjoy nice weather and beach walks or having a social dring looking at the ocean …wowowowo Yes I am almost 80 and living a super great time overseas – Do not sufer get the hell out ….

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