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Planning for the golden years: how much do you need to retire?

How Much Do I Need To Retire?

After decades of hard work, you deserve to put your feet up and retire in style. But the big question that faces many Aussies when the time comes is how much will I need in super?
Some experts say $1 million and a mortgage-free home is the bare minimum for a comfortable retirement. Others say just over half that is enough.

With so many different opinions out there, and without a goal to work towards, it can be hard to plan and save for your golden years. To make it easier, we’ve put together everything you need to know to achieve the retirement you want.


Comfortable retirement

The Australian Association of Superannuation Funds estimates that the average Aussie needs $545,000 in super and to own their own home mortgage-free to live comfortably in retirement. The average couple, on the other hand, will need around $640,000. With that kind of budget, you’ll be able to enjoy little luxuries like:

  • Refreshed wardrobe
  • Regular leisure activities
  • Occasional overseas travel
  • Restaurant dining
  • Owning, repairing and servicing a decent car
  • High end home appliances.

You’ll also be able to afford the highest level of private health insurance, and to run air conditioning in the summer and heating in the winter – pretty much the epitome of comfortable living.

Modest retirement

If you’re happy with a modest retirement, on the other hand, you’ll only need $70,000 and a mortgage-free home. You may need to adjust your lifestyle though, and unfortunately you won’t have budget for luxuries like home improvements or overseas holidays. You’ll be able to enjoy an occasional trip domestically, but you’ll have to watch your utility costs and choose a cheaper mobile phone plan.

Age Pension

Last of all, if you retire on a government age pension alone, you’ll live a very basic life, even if you own your own home. Simple stuff like running the heater in winter or buying a restaurant dinner may, unfortunately stretch your budget.

In terms of eligibility, the majority of Australians are eligible for a full or part age pension. This represents a maximum of $24,081 per annum for singles and $36,301 for couples. If you’re nearing retirement you should check to see what concessions and assistance you qualify for, as you may be eligible for additional payments and allowances depending on your circumstances.

To qualify for the maximum amount, single homeowners can have up to $258,000 in assets, while those who don’t own a home can have $465,500. Home owning couples can have up to $387,500 and non-homeowners can have $595,500.

If you own assets valued higher than those limits your aged pension will decrease progressively.


The above figures for a comfortable and modest retirement are only rough guides, and depending on your circumstances, your retirement may cost more or less depending on a number of factors. To figure out exactly how much you need, SuperGuide recommends considering:

  • How many years in retirement you may have: if you retire at 60 you can expect around 24 to 30 years (obviously depending on how long you live).
  • Whether you’re single or in a couple: it’s said that couples live cheaper as they share costs. If you’re single, you’ll have to cover rent, utilities and other costs by yourself.
  • If you plan to continue working into retirement: continuing to work part-time in your retirement is a great way to keep busy and supplement your income.
  • How much you spend right now: the more you spend right now, the more your retirement is likely to cost. Money Smart recommends budgeting for at least two thirds of your current income in retirement if you’re an above average income earner.
  • Whether you own your home: owning a home without a mortgage makes retirement considerably cheaper.
  • Whether you have any other investments or income: If you’ve got shares paying you dividends or investment properties then you may need less in savings.
  • How much your super and other investments grow during your retirement: your super and other investments may grow or decrease in value during your retirement. This could affect the quality of your retirement so keep this in mind when deciding how you invest your money.
  • Whether you want to set up your kids: if you hope to support your kids with something like a home deposit, this will obviously set back your retirement fund.


It’s well worth spending some time thinking about each of these key factors to try and devise an annual budget for your retirement. Use this to figure to calculate the total cost of your retirement and your ultimate savings goal. Once you’ve got a goal to work towards, consider your current financial position and your ideal retirement date, then devise a plan to achieve your savings goal by that date.

Unless you’re an experienced investor or financial planner, it might pay to get expert advice from a registered financial advisor who specialises in retirement planning. That way, with a little help and a solid plan, you’ll be living it up in your golden years – just like you should be!