Australians think they need $800,000 in superannuation for a comfortable retirement, new research from iSelect shows, while the median amount they have saved is well short of this, at $180,000.

A man thinks very carefully about his money and investments.

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Many not sure what’s needed

The life insurance comparison provider surveyed more than 3,000 people across Australia, the US, and Canada about their retirement savings aspirations and found that 41% of Australians surveyed reported not knowing how much money they would need to retire.

The next highest band, at 25%, believed they needed between $500,000 and $1 million to retire, while 9% thought they needed $1 million to $2.5 million.

The median amount came out at $800,000, while the median amount currently held in superannuation came out at $180,000.

Perhaps worryingly, 37% of people reported not knowing how much superannuation they had put aside.

ISelect said further:

22% of Australians said they have up to $100,000 saved for their retirement, and 24% reported to have between $100,000 and $500,000 saved. 4% of savvy savers in Australia reported having more than $1,000,000 already saved in their retirement fund.  

iSelect pointed out that the Association of Superannuation Funds of Australia says that singles retiring at age 67 would need $630,000 and couples would need $730,000 to achieve a comfortable retirement.

A large 73% of those surveyed by iSelect said that cost-of-living increases will either severely or moderately impact their retirement plans, while only 7% said it would have no effect.

Aiming for 65

In terms of the age of retirement, iSelect said:

According to our study, Aussies plan to retire at an average age of 65.2 years, despite the Australian state pension being available from age 67. Out of the respondents who aren’t retired, 30% said they plan to retire between 40 and 60 years of age. This is followed by 27% who aim to retire between 61 and 65 years, with the majority (31%) of Aussies planning to retire between the ages of 66 and 70 years. Remarkably, 12% of respondents anticipated they would retire between 71 and 100.

iSelect said men appeared to have a better handle on their retirement savings than women, although 32% still said they didn’t know how much superannuation they would need, compared with 51% of women.

When it came to their actual retirement savings, men reported savings of $230,000, whereas women’s median savings were considerably lower at $100,000. The Super Members Council recently reported that women are being hit hardest by unpaid super, costing the typical working woman more than AU$26,000 in savings by retirement. Our findings have reported an even bigger difference.

iSelect said that, approaching retirement, adults aged 55-64 report needing $750,000 and have saved $400,000, while those aged 65-74 expect to need $700,000 and have saved just $250,000.