Do I really need $1 million to retire?

How much money do you need to retire? It’s a question most Australians ask themselves at some stage. You might’ve heard you need $1 million – it’s the figure that’s often thrown around as the financial retirement ideal. But, the truth is there’s no one-size-fits-all amount. A comfortable retirement will look different for everyone.

While 7 figures in superannuation may sound great, the reality is most people heading into retirement won’t have anywhere near that amount. According to a 2019 report by the Association of Superannuation Funds of Australia Limited (ASFA), Australians aged between 60-64 are retiring with a median balance of $154,452 for men, and $122,848 for women1.

It’s completely understandable – and can be helpful – to have a figure in mind for your retirement savings goal. What can be more important though, is having a good understanding of what a ‘comfortable retirement’ looks like to you. Once you know that, you can go about formulating how much money you need to retire.

To work out how much super you might need for retirement, here are some things to consider.


Think about the kind of lifestyle you want in retirement

The type of lifestyle you want to lead in retirement plays an important role in determining how much money you need for life after work.

For some people, retirement means slowing down and enjoying more time with loved ones. For others, it could mean new hobbies or doing all the big-ticket things you never had time for, such as travelling overseas.

If you’d like to live with the same level of comfort as you did during your working life, you may want to figure out how much you need to cover those expenses – minus any work-related costs. Or, if you’re happy to live more modestly after you retire, you may not need as much.

A ‘comfortable’ and ‘modest’ retirement will mean different things to different people, which is why it can be helpful to have a ‘standard’ to compare against.

ASFA Retirement Standard: A comfortable vs modest retirement

The Association of Superannuation Funds of Australia’s (ASFA) Retirement Standard provides an estimate on how much money you need for a ‘modest’ or ‘comfortable’ retirement, for both singles and couples. It also explores what a comfortable retirement looks like, versus and modest one. The table below also compares these standards to the Government Age Pension. (Note: these estimates assume you own your home.)

Budgets for various households and living standards for those aged around 65

  ‘Comfortable’ retirement ‘Modest’ retirement Age Pension-based retirement *
What can it afford?
  • Regular leisure activities
  • Dining in restaurants regularly
  • A reasonable car
  • Budget for home improvements
  • Domestic and occasional overseas trips
  • Premium private health insurance 
  • Occasional leisure activities
  • Take away and cheap restaurants
  • A basic car
  • Budget for small home repairs
  • One domestic holiday or a few short breaks
  • Basic private health insurance
  • No or low-cost leisure activities
  • Inexpensive takeaway or club special meals
  • No car, or no budget for repairs
  • No budget for home repairs
  • Very short breaks or day trips in your city
  • No private health insurance
Single household budget
(for those aged around 65)
$43,687 per year $27,902 per year $22,375 per year (maximum basic rate)
Couple household budget
(for those aged around 65)
$61,909 per year $40,380 per year $33,732 per year (maximum basic rate)

* Excludes the pension supplement and energy supplement.

Source: ASFA Retirement Standard, June quarter 2020, national


Know where your money goes – day-to-day expenses

Calculating how much super you need to retire will largely depend on your lifestyle and daily expenses. To work out your daily expenses, consider:

  • How much do you spend on groceries and everyday items?
  • How often do you eat out at a restaurant or cafe?
  • How many local, domestic or international holidays do you take each year?
  • Does your house need some work done?

Beyond your everyday expenses and the odd splurge, you also need to plan for unexpected costs. If you’re one of the 60% of Australian home owners who are still paying off their mortgage, you also need to factor any outstanding debts into your budget.


Consider how long you'll spend in retirement

Thanks to better nutrition, public health and medical advances, Australians are living longer. For example, 40% of women who are 65 today – and 26% of men who are 65 – are estimated to live to at least 90 years old, which is well above average life expectancies2.

Increased life expectancy means you may need to plan for a longer retirement, or consider transitioning into retirement.

Life expectancy 
Current Age Male Female
45 82 85
55 83 86
65 84 86
75 87 89
85 91 92

Source: Compiled from Australian Life Tables

Life expectancy calculators use data to estimate how long you might live, so you can prepare for funding your retirement. But it's important to remember algorithms play the averages and can't predict how long you will actually live. So it may be better to estimate that you will live longer than the average when calculating your retirement income needs.


Know your eligibility for the Government Age Pension 

If you don’t have enough financial resources, such as super, to fund your retirement, the Age Pension can help. The Age Pension is a government payment – described as a ‘safety net’ – for people who meet the age and residency requirements. Around 62% of Australians over 65 receive a full or partial government pension3.

The amount you receive depends on a range of factors, such as your assets, how much super you have and any other income you may receive in retirement, for example rental returns.  




Consider a transition to retirement 

For some people, completely stopping work once you hit retirement age can be a massive shock – from a lifestyle, self-worth, and financial perspective. Instead, you might like to consider easing your way into retirement. This is where a transition to retirement (TTR) strategy comes in. It allows you to access your super while you keep working. If you’ve reached your preservation age and are still working you can do this to supplement your income while working fewer hours. If you’d like to keep working full-time, you can boost your super while saving on tax.              

If you’re worried you won’t have enough super saved for your ideal retirement, a TTR strategy could be an option. You can use TTR income payments to top-up your take-home pay to work less or save more.




Calculate how much money you may need to retire

To estimate how much super you might need to retire, and how your current super savings are tracking, you can use AustralianSuper’s super projection calculator. The calculator can help you work out if you have enough income for your retirement goals, and how long your super could last. It can also show you how a few changes today can make a huge difference in the long run.


For help planning your retirement contact the AustralianSuper team.


Get the right advice for your retirement planning

Everyone’s retirement story is different, and it’s never too early or too late to think about life after you finish working. Whether you’re in the stages of planning or are already retired, find out how AustralianSuper can help build the retirement lifestyle that’s right for you.

Our team of financial advisers are also here to help with your questions and provide relevant information that’s tailored to your personal circumstances and financial goals, so you can make the most informed decisions about managing your super in retirement.



  1. Better Retirement Outcomes: a snapshot of account balances in Australia
  2. Australian Government Actuary – Australian Life Tables
  3. Based on data from the Australian Bureau of Statistics and Department of Social Services



This information is general financial advice which doesn’t take into account your personal objectives, situation or needs. Before making a decision about AustralianSuper, you should think about your financial requirements and refer to the relevant Product Disclosure Statement. AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898. 


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