It’s more than the industry advises, but is $1 million really enough to retire on these days? (Source: TikTok,jess.bell/Getty)
Australians are being urged to really work out how they want their retirement to look and make sure their superannuation and other assets will be able to support that. Everyone will have a different vision for their golden years, but some of the figures that are frequently cited might not work for most young workers today.
Some might want to be holidaying every few months, while others might be happy to occasionally head to a picturesque regional town and enjoy the serenity. Financial advisor Jess Bell told Yahoo Finance that many Aussies might be surprised at how much they truly need to have the retirement they desire.
“I often get asked, ‘Is it $1 million that I need?’ And obviously it’s like, well how long’s a piece of string?” she said.
“But I’m seeing more and more often that a million dollars won’t cut the cake for a lot of people.”
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The Findex financial advisor stressed that this aspirational benchmark might not apply to many Aussies who can make do with less, but she has been seeing it pop up in conversation more regularly with her clients.
She said this million dollar mark applied to couples, not singles, but is still well above what the industry typically suggests.
The Association of Superannuation Funds of Australia (ASFA) said couples need around $690,000 in their nest egg for a comfortable retirement. Single people would need $595,000.
This figure is based on the idea that a retiree has paid off their home, and the money will last them from 65 to 84 while also receiving a part Age Pension.
But digging into what a “comfortable” retirement looks like to ASFA, it might not match with your vision.
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The answer to the nest egg question is changing over generations. (Source: Supplied/Getty)
Under this scenario, ASFA assumes you’ll be able to afford top level private health insurance, own a reasonable car (as well as pay for car insurance and the vehicle’s upkeep and maintenance), and enjoy regular leisure activities.
You’ll also be able to afford home repairs, regular professional haircuts, replace your worn-out clothing and have modest wardrobe updates, and confidence to use air conditioning or heating.
ASFA also said a retiree’s $690,000 nest egg will also allow you to have one domestic trip to visit family each year and one international holiday every seven years.
“If people have multiple cars or caravans, and they’re doing all of those trips within Australia, but then also go overseas multiple times a year, maybe they’re also helping out their adult children and grandchildren, I just think the cost of living is higher than what ASFA’s [version of] comfortable looks like,” Bell told Yahoo Finance.
“A lot of people are wanting to enjoy the more, not necessarily lavish things in life, but if you want to go out for dinner, you can.
“It’s not to say that you will [dine out] every single week, multiple times, but just to have the option to.”
Under ASFA’s vision of a comfortable retirement, people would be able to have “occasional” meals at restaurants, takeaway coffees, or order food to their homes.
When you break it down annually, single people needed around $53,289 per year to get by, while couples needed $75,319, according to ASFA.
But a recent Vanguard report found Aussies under 45 reckon they would need around $100,000 per year per household in today’s dollars to enjoy their retirement years. One of the biggest factors highlighted in that research was around homeownership.
Only 8 per cent of those surveyed in Vanguard’s 2025 How Australia Retires report were still paying for a mortgage after finishing work. But more than one in three Millennials (36 per cent) expected they will have a mortgage when they retire, compared to 27 per cent for Gen X.
That will put a much higher burden on their superannuation compared to someone with their home fully paid off.
The age at which Aussies are retiring has slowly been pushed higher over the last few decades due to a variety of factors.
At the start of the millennium, the average person would retire just before 55.
Back then, preservation age was 55, which was the earliest you could access your superannuation. But that threshold has been steadily increased depending on your date of birth, with those born after July 1, 1964 now needing to be 60 before they can access their super.
You also now have to be 67 or older to access the Age Pension.
Before 1995, the eligibility was 65 for men and 60 for women, with the latter number rising to 65 by 2013. It was raised to 67 on July 1, 2023.
KPMG analysis found last year that the average age of retirement these days is 66.2 years for men and 64.8 years for women. But it’s not just access to super or the Age Pension that’s influencing when Aussies retire.
“The adoption of working from home has made many older Australians in professional jobs realise that they could ‘semi-retire’ and continue to dabble in the workforce from home or even from a coastal location,” KPMG urban economist Terry Rawnsley said.
Bell told Yahoo Finance that some people are holding onto their jobs in their 60s and 70s to keep their brains working and have good cognitive stimulation, however some are staying in the workforce because they don’t have enough money to survive retirement.
Bell said Aussies shouldn’t just pick $1 million because it’s a good round number.
She added there are several online calculators that will be able to determine a rough number, but they can be surface-level and might not take into account all the factors of a person’s life.
AustralianSuper head of advice and guidance Ross Ackland said chasing a seven-figure nest egg can leave many in a state of anxiety considering how hard that might be to achieve.
Recent AustralianSuper research found 44 per cent of Aussies retired in the last five years with less than $100,000 in super, 35 per cent retired with between $100,000 and $499,999, and only 21 per cent had $500,000 or more.
Ackland suggested it’s better looking at the lifestyle you want rather than picking a “magic number”.
“We know superannuation is incredibly important and encourage members to make extra contributions where appropriate, but super is only one piece of the retirement puzzle,” he said.
“The key to retirement confidence is to be realistic, understand your needs and make the most of all the tools available to you — whether that’s superannuation, the age pension, good spending habits or even simple planning tools that help you get a clearer picture of what you might need.
“The key isn’t a magic number. It’s knowing what kind of life you want and putting the pieces in place to live it.”
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