How much do you need in super & savings to retire comfortably?
- How much you need to retire depends on your lifestyle, housing situation and expected spending.
- Superannuation isn’t the only source of retirement income and many Australians rely on a mix of super, the Age Pension, savings, and investments.
- Understanding your likely spending in retirement is one of the most important steps in working out how much you'll need.
ABS figures show financial security remains the main reason older Australians delay retirement, even as fewer people rely solely on the Age Pension and more draw most of their income from super. At the same time, the ASFA Retirement Standard reports that the cost of maintaining a decent lifestyle in retirement continues to rise.
So what does that mean for retirement planning today, and how much super or savings do Australians really need?
How much super do you need to retire?
ASFA figures show retired Australian homeowners will likely spend around $35,000 per year to maintain a modest lifestyle in retirement, while a comfortable lifestyle could cost around $54,000 per year, as of September 2025. For couples, those costs rise to approximately $51,000 and $77,000 respectively.
Renters, who typically pay more for housing, will likely spend around $50,000 per year to maintain a modest lifestyle if single, or $67,000 if one of a couple.
"Thanks to superannuation, most Australian retirees are living with additional income beyond the Age Pension each month, which makes them more financially resilient," ASFA CEO Mary Delahunty said.
"In Australia, retirees’ own super savings sit on top of our state pension and provide a buffer. This means financial flexibility they would not have if they solely depended on monthly payments from the taxpayer."
More than four in 10 retirees rely on government pensions as their main source of income in 2024-25, as per ABS statistics. Another 28% rely on their superannuation, annuity, or private pension.
The super balance likely needed at age 67 in order to maintain a comfortable retirement is $595,000 for single people or $690,000 for couples, as the chart below shows:
The Age Pension, inclusive of supplements, is $30,646 per year for single retirees and $46,202 for those coupled up, leaving a notable gap that's typically filled by payments from a person's super fund, savings, or investment earnings. Meanwhile, as Aussies applying for the pension face an asset test, many may not be eligible for the government payment, leaving them to fund their own retirement.
What does a 'comfortable' retirement look like?
Previous reviews have found that ASFA’s “comfortable” standard reflects a lifestyle many households may not experience during their working years, as it more closely aligns with the spending habits of the top 20% of income earners.
What is a comfortable lifestyle?
According to ASFA, a 'comfortable' retirement is one that includes an annual domestic trip and an international holiday every seven years, occasional meals out and takeaway, and ownership of a reasonable car, top level private health insurance, and regular leisure activities.
What is a modest lifestyle?
A 'modest' lifestyle is said to be one that allows an annual domestic trip or a few short breaks, limited meals out at cheaper restaurants, infrequent leisure activities, ownership of a cheaper car, and the need to keep a tighter leash on utility costs. Retirees who rent their home and live a modest lifestyle may live in a one or two bedroom apartment in a middle- or outer-ring suburb.
What lifestyle could the pension likely afford?
Finally, the industry body expects retirees relying solely on the pension will likely have to do without health insurance, home repairs, and potentially a car. They may also have to limit their usage of a home heater during winter, forgo significant holidays and regular activities, and will likely only be able to fit inexpensive takeaway meals or local club specials into their budgets.
Savings.com.au's two cents
You likely don't need to be a millionaire in order to retire comfortably, but you do probably need a plan in place to achieve your nest egg goals. If you're considering retiring, it's important to know how much you normally spend on a weekly basis and have a good idea of the emergency expenses you could face year-to-year (these might be vet bills, car repair costs, or the replacement of appliances, for instance).
You may then compare your expenses with those suggested by the ASFA to see how your super balance stacks up. You might also do some rough calculations using rules of thumb listed below, or even turn to MoneySmart's retirement planner.
Don't forget to factor in any loan repayments or the cost of repaying your mortgage using super when crunching your personal retirement numbers.
What if you don't have superannuation or can't access the Age Pension?
It’s not uncommon for Australians to reach retirement with little or no super, and those that do may rely on savings or investment income to retire instead. This can happen for a range of reasons: they may not have spent much of their working life in Australia, or spent limited time in the workforce (particularly since the Superannuation Guarantee began in 1992 and increased in the years that followed). They may have taken long periods out of paid work - as is common among women, many of whom step back to care for children or dependants. It’s also a common occurrence among self-employed Australians, as they're responsible for making their own super contributions and may not consistently do so.
While four in 10 retirees rely mainly on the Age Pension and three in 10 on their superannuation, smaller groups depend on other income sources.
Around 3% report rental income as their primary income source in retirement, another 3% or so rely mainly on dividends, 1% expect most of their income to come from a business, and around 10% rely on another main source. ABS data also shows that around 8% of retirees plan to meet their main living costs using savings or by selling assets.
All that is to say, if your super balance isn't where you'd like it to be or you don't qualify for the Age Pension, you may have other ways to fund your retirement.
How much in savings or investments do you need to retire?
There's no magic answer as to how much a person will need in order to retire, but there are several 'rules of thumb' that could provide a rough guide:
- How much will you spend during retirement?
One common guideline suggests retirees may spend around 70% of what they spent during their working years. Other sources put the figure between 65% and 80%. It’s a starting point rather than a perfect formula, but it can help you estimate your annual retirement budget. - How much of your investments would you need to withdraw?
Another long-standing guideline is the safe withdrawal rate, typically referenced as 4%. It suggests a retiree could withdraw 4% of their investment balance in the first year of retirement and, after adjusting that amount for inflation each year, may have a good chance of their savings lasting around 30 years. It’s not guaranteed - no investment strategy is - but may provide a simple way to turn your desired annual income into a rough lump-sum target. Of course, this is a rule of thumb, not a law, but it does largely line up with minimum drawdown rates imposed by super laws.
- You can combine the two to get a rough idea of how much you may need to retire
First, estimate what you might spend in retirement. For many people, this is roughly 70% of their current spending. Then apply the 4% rule to that figure to estimate the lump sum required. Here's how you might do that:
- Target replacement rate (e.g. spending)
If you spend $60,000 a year currently and you feel aligned with the 70% spending expectation, you might expect to spend $42,000 per year in retirement ($60,000 - 30% = $42,000). - Safe withdrawal rate
Once you've worked out your estimated annual spending, you can calculate how much you'd need invested in order to withdraw the needed funds. If you think a 4% withdrawal rate sounds realistic for your financial position, you could divide your estimated expenditure by 0.04, returning the sum you'd assumably need invested, as per the rule of thumb.
So, if you currently spend $60,000 per year you might expect to spend $42,000 annually when you retire, which means you may need roughly $1.05 million invested ($42,000 ÷ 0.04 = $1.05 million).
Or, if you currently spend $50,000 a year, you might expect to spend $35,000 in retirement ($50,000 - 30% = $35,000), and you may need an investment portfolio worth $875,000 to secure that income ($35,000 ÷ 0.04 = $875,000).
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What is the retirement age in Australia?
Australia has no definitive retirement age which means if you are in the workforce you can keep working until your heart so desires. The ABS' retirement and intentions statistics identified the average intended retirement age among those aged over 45 years was 65.6 years, yet Australians retiring in 2024-25 did so at an average age of 57.3 years.
Accessing your superannuation
In order to access your superannuation, you generally need to have reached your preservation age and be retired (although there are some hardship scenarios which may allow you to access super early).
Date of birth | Preservation age |
|---|---|
Before 1 July 1960 | 55 |
1 July 1960 - 30 June 1961 | 56 |
1 July 1961 - 30 June 1962 | 57 |
1 July 1962 - 30 June 1963 | 58 |
1 July 1963 - 30 June 1964 | 59 |
From 1 July 1964 | 60 |
If you're aged between 60 and 64 and stop working for any amount of time, you're considered retired for the purposes of accessing your super - even if you have no intention of retiring completely. This means you can cash out the super you've accumulated to date, even if you begin working again under a different employment arrangement. From the moment you turn 65, there are no requirements or special conditions to meet in order to gain full access to your super.
If you've reached your preservation age and aren't ready to give up work, you may wish to access a portion of your super through a 'transition to retirement' pension. A 'transition to retirement' pension enables you to access some of your super (up to 10% per financial year) through regular payments, even if you're receiving an income from an employer or business.
Accessing the Age Pension
To access the Age Pension, you need to be 67 years or older. You also need to pass residency, income, and asset tests.