The question of how much super you’ll need to retire with depends on your personal circumstances, financial resources (inside and outside super), and the lifestyle you have now and want in retirement. Knowing how much you can afford to retire on gives you a clear goal to aim for when it comes to your super and savings decisions.
What to consider when working out how much will be enough for your retirement
- How much you spend now
- Years in retirement you expect you’ll have
- Whether you’re single or in a couple
- Whether you plan to keep working
- Other factors that can impact your retirement savings
- Whether you own your home
- Where will your income come from?
- Whether you’re eligible for the Age Pension
The general rule of thumb is that you’ll need approximately two thirds1 of your current after-tax income in retirement to maintain your current lifestyle.
Today’s retirees can expect to live on average until 81 years (men) and 85 years (women)2. That means a retirement of around 20 years if like many people you retire in your mid-sixties. With more years to enjoy your retirement, you'll need to ensure your money lasts as long as you do.
There’s a good chance that you may live more than the average, so your retirement could be up to 30 years. In the chart below, the couple icon refers to the probability that at least one member of a couple will live to a particular age. For women, there’s a 60% probability (approximately) of living into their late eighties.
Super savings for couples have the potential to last longer3 because couples can share the costs of living - from rent, home maintenance and utilities, to everyday expenses and running costs.
Working part time in the early years of retirement could make your super last longer and afford you a better lifestyle in retirement.
To feel comfortable in retirement, you need to feel comfortable that your savings will last. To achieve this, it’s important to be aware of factors that can influence the value of your savings over time – such as market movements, inflation, ability to access lump sums, and estate planning. Read more
In real terms (adjusting for inflation), home ownership adds approximately $23,000 a year to the average householder aged over 654. This will clearly have a big impact on the amount of super you’ll need in retirement, and on your retirement age.
Your retirement nest egg is made up of your assets outside of super, combined with your super balance and the Age Pension (if you’re eligible). This might include investments in property, term deposits, shares, or trusts. The important thing is that your assets and income allow you to pace your income to match your retirement lifestyle. Read more
To find out whether you’re eligible, you can check with Centrelink, or speak to us.
What sort of retirement will your super give you?
For those aged around 65, a modest lifestyle in retirement will require an income of $40,739 for a couple and $28,179 for a single person. A comfortable lifestyle in retirement will require an income of $62,562 for a couple and $44,224 for a single person.5
The lump sum required to support a comfortable lifestyle can vary from person to person. Aware Super estimates that our single members need about $400,000 and couple members about $500,000 at age 67 to finance a comfortable lifestyle in retirement.6
If you’re ready to retire, then we’re ready to come with you.
2 Source: Australian Bureau of Statistics
3 Source: ASFA Retirement Standard, December quarter 2020. The figures in each case assume that the retiree(s) own their own home and relate to expenditure by the household. This can be greater than household income after income tax where there is a drawdown on capital over the period of retirement.
4 Daley, J., Coates, B., Wiltshire, T., Emslie, O., Nolan, J. and Chen, T. (2018). Money in retirement: More than enough. Grattan Institute.
5 The figures in each case assume that the retiree(s) own their own home and relate to expenditure by the household. This can be greater than household income after income tax where there is a drawdown on capital over the period of retirement.
6 These numbers are slightly lower than ASFA’s estimates because of the differences in projection assumptions. In addition, our specifically designed investment approach aims to safeguard our members’ retirement savings from the impact of large market falls when they are close to, or in retirement