How much do I need in retirement?


How much you need to save for a comfortable retirement is a question many of us ask.

How much is enough?

While we all hope for a simple answer, how much money you need in retirement differs for everyone. Additionally, a comfortable retirement is based on a whole range of factors including:

  • When you retire
  • How long you’ll spend in retirement
  • Whether you’ll sell assets to fund your lifestyle
  • How your assets are invested.

There are a number of guides that are useful to consider when working out how much you need to save for your retirement.

A modest or comfortable retirement

The ASFA Retirement Standard is published each quarter by the Association of Superannuation Funds of Australia (ASFA). It provides approximate figures for the level of income required for a modest or comfortable lifestyle, assuming you own your own home.

The latest figures available state a single person aged 65 requires an annual income of $31,785 for a modest retirement lifestyle and $50,004 for a comfortable lifestyle. For a couple of the same age, the figures rise to $45,808 for a modest retirement and $70,482 for a comfortable retirement.1

A modest retirement lifestyle assumes you are able to afford basic activities. A comfortable retirement lifestyle enables an older, healthy retiree to be involved in a broader range of leisure and recreational activities and to have a good standard of living. You should be able to afford to buy household goods, private health insurance, a reasonable car, good clothes, electronic equipment and to travel overseas and in Australia.

Re­tire­ment sav­ings plan

While saving for retirement can seem somewhat daunting, there are a few simple strategies to use when planning your best financial future.

Determining what you need as a lump sum

It’s also useful to understand how much money you need to live a modest or comfortable retirement as a lump sum.

According to ASFA, singles or couples aged 67 need $100,0002 for a modest retirement. This figure assumes you qualify for a full age pension.

For a comfortable retirement, the lump sum estimates are much higher - $595,000 for a single person and $690,000 for a couple, although this also assumes you qualify for a part age pension.3

A different approach is to look at your pre-retirement income and consider how much of it you will need in retirement. Assume, for example, you will need 65 per cent of your pre-retirement income, so if you earn $50,000 now, you might need $32,500 in retirement.

Another method to calculate a lump sum

Another method is to take your current annual expenses and multiply this amount by the number of years that represent the difference between the age you retire and average life expectancy to calculate the lump sum you may require in retirement.

In Australia, average life expectancy is 83.94 years4. If you take the $32,500 figure and assume you retire at age 67, this would equate to a lump sum target of $550,875. This is a guide only. Keep in mind the investment returns you generate, consumer price increases and your actual expenses in retirement will impact the amount you need to fund your retirement.

No matter how much you assume you need, the more time you have to plan, the greater your chances of achieving your retirement income goal.

There are many steps you can take to help you achieve your retirement savings goal. First, understand your current financial position including your income and expenses, what you own and what you owe.

You may consider strengthening your financial position by repaying debt, building up your savings and investments or making additional contributions to super. Start considering how best to use your financial resources to support your income needs in retirement. Make sure you monitor your plan on an ongoing basis.

The idea is to make the most of the retirement planning opportunities available to you. And remember you don’t have to go it alone. Taking financial advice can help you achieve the retirement you hope to achieve.

Next: How much will you need to enjoy your retirement?


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Related content

Thinking about retirement, but not sure where to start? Get tips and information in our Planning for Retirement guide, to help you get started today.


Not sure if your super will last the distance in your retirement? Our Super & Retirement calculator may provide a guide on the super balance you might have when you retire and how long it might last.

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Things you should know

The article was prepared by Bryan Ashenden, Head of financial literacy and advocacy at BT and is current as at 1 July 2023.

BT - Part of Westpac Banking Corporation.

This information does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness, having regard to these factors before acting on it. This information provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. This information may contain material provided by third parties derived from sources believed to be accurate at its issue date. While such material is published with necessary permission, no company in the Westpac Group accepts any responsibility for the accuracy or completeness of, or endorses any such material. Except where contrary to law, we intend by this notice to exclude liability for this material. Any tax considerations outlined in this publication are general statements, based on an interpretation of the current tax law, and do not constitute tax advice.  The tax implications of super investments can impact individual situations differently and you should seek specific tax advice from a registered tax agent or registered tax (financial) adviser.