The question we hear most often from clients approaching retirement is: "Do I have enough?"
It's a reasonable question, and the honest answer is: it depends. But that's not a cop-out, it's the starting point for a genuinely useful conversation.
The ASFA Retirement Standard
The Association of Superannuation Funds of Australia (ASFA) publishes a Retirement Standard that gives a useful benchmark. As at 2024, ASFA estimates that a comfortable retirement requires:
- Couples: approximately $690,000 in superannuation
- Singles: approximately $595,000 in superannuation
These figures assume you own your home outright and are eligible for a part Age Pension. A "comfortable" retirement is defined as one that allows you to be involved in a broad range of leisure and recreational activities, have a good standard of living, and maintain your health and wellbeing.
A "modest" retirement, one that is better than the Age Pension alone but still quite restricted, requires significantly less: around $100,000 for a couple.
Why the number varies so much
The ASFA figures are a starting point, not a destination. Your actual number will depend on:
Your lifestyle expectations. Do you plan to travel extensively? Do you have expensive hobbies? Do you want to help your children financially? These factors can add significantly to your required income.
Your health and longevity. A healthy 60-year-old today can reasonably expect to live into their late 80s or beyond. A retirement that lasts 30 years requires a very different strategy from one that lasts 15.
Whether you own your home. The ASFA figures assume home ownership. If you're renting in retirement, your income needs will be substantially higher.
Your other assets. Super is typically the largest retirement asset, but not the only one. Investment properties, shares, and other savings all contribute to your retirement income.
Your Age Pension entitlement. Depending on your assets and income, you may be eligible for a full or part Age Pension, which can significantly supplement your super income.
What you can do now
If you're within 10 years of retirement, the most important thing you can do is get a clear picture of where you stand. That means:
- **Knowing your current super balance** and projecting what it will be at retirement, based on your current contributions and investment returns.
- **Modelling your retirement income**, what you'll need, what you'll have, and whether there's a gap.
- **Reviewing your contribution strategy**, are you making the most of concessional contributions? Are you eligible for catch-up contributions?
- **Reviewing your investment strategy**, is your super invested appropriately for your time horizon and risk tolerance?
The earlier you do this work, the more options you have. But even if you're close to retirement, there are often meaningful improvements that can be made.
This article contains general information only. It does not take into account your personal financial situation or needs. Please seek advice from a licensed financial adviser before making any financial decisions.