Australians are being urged to find out their own retirement target, based on their own spending and super balance. (Source: Getty)
The amount of money Australians need in superannuation to retire comfortably has been revealed. While the amount has ticked up with inflation, experts say Aussies may already be well on track without realising it.
Fresh figures from Super Consumers Australia found the typical single homeowner will need around $322,000 in superannuation at 65 for a comfortable retirement, while a homeowner couple needs a combined $432,000. This is a modest increase from last year and among the lowest projections across the industry.
This “medium” retirement standard would allow singles to spend $1,690 per fortnight, or $44,000 per year, and couples to spend $2,460 per fortnight, or $64,000 a year.
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Super Consumers Australia deputy CEO Dr Katrina Ellis said people might “already be on track” to achieve a comfortable retirement and not realise.
“For many people this is good news – by knowing your Retirement Super Target you can balance your quality of life now with your quality of life in retirement,” she said.
Super Consumers Australia’s independent savings targets are based on real spending data of homeowners from the Australian Bureau of Statistics.
They show how much super would be needed to sustain your desired standard of living until the age of 90, assuming you own your home outright and receive the Age Pension.
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To meet a “high” retirement standard, singles would need $891,000 in superannuation, which could allow them to spend $2,350 a fortnight or $61,000 a year. Couples would need $1,216,000 in superannuation to spend $3,420 a fortnight or $89,000 a year.
For a “low” retirement standard, singles would need $74,000 in superannuation to spend $1,230 a fortnight or $32,000 a year. Couples would need $99,000 in superannuation to spend $1,810 a fortnight or $47,000 a year.
It’s worth noting these targets are lower than those produced by the Association of Superannuation Funds of Australia (ASFA).
Their “comfortable” retirement standard assumes retirees need an annual income of $53,289 as a single and $75,319 as a couple. This would require a super balance of $595,000 for singles and $690,000 for couples at age 67.
This may be a higher standard of living than what most Australians have in retirement, or before they retire.
Super Consumers Australia has recommended all Australians find their own personalised retirement target and use its figures as a first step.
It can be helpful to do a budget to find out how much you would likely need to spend in retirement. You can use tools like the MoneySmart Budget Planner to help you understand your own spending.
Some super funds will give you an estimate of your retirement income on your annual statement, or when you log into the website or app. You can also estimate your retirement income using the MoneySmart Retirement Planner.
Compare your budget to your predicted retirement income to see if you are on track. If you aren’t, it could be worth speaking to your super fund or a financial adviser to see what steps you can take.
Ellis said it should be easier for Aussies to understand their retirement savings and spending targets.
“Super funds are good at helping you understand and make decisions for your retirement, while some leave a lot to be desired,” she said.
“While we encourage every homeowner to find their own retirement target we also want to see super funds make it a lot easier to do across the board.
“Good funds provide an estimate of retirement income for their members already. We want to see all funds provide this guidance.”
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