July 19, 2026 — 5:00am
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For all the ways in which every person and their financial goals are unique, often many commonalities are shared. Plenty of people, for example, want to be able to afford a nice holiday once a year.
Some of us aspire to never having a credit card. Most of us strive to be comfortable enough that we don’t feel immediately panicked when an unexpected bill comes in or when we’re at the supermarket checkout.
Everyone wants to enjoy a good quality of life well into retirement.Dionne Gain
And all of us, I’m fairly confident in guessing, want to know that, at the end of our working lives, we can expect a comfortable retirement.
For a long time, conventional wisdom said that the magic superannuation balance every person needs to hit by the time they’re 65 is $1 million. It’s not as if this number is some arbitrary figure plucked out of thin air, but that also doesn’t mean this one size guide should fit all.
There’s also a sense among many of us that, thanks to our very effective mandatory superannuation system, our retirement plans are a set and forget thing. With 12 per cent of our pay being put away and our balances ticking over regularly, do we really need to try to carve out more time from our already time poor schedules to do more hypothetical planning?
The short answer is that yes, we absolutely do.
Just because a generation has seen improvement in the length of life, doesn’t mean there will be improvement in the quality of those years.
Demographer Mark McCrindle
Today, Australia now ranks among the top OECD nations for life expectancy. And so, with each generation on track to live longer than the ones that came before us, as well as more people entering retirement still with mortgages, and more young people starting to invest at an earlier age in life, it’s worth considering what a comfortable retirement actually needs to look like.
Because, as demographer Mark McCrindle noted earlier this year, while Gen Zers (those currently aged between 16 and 31) are expected to live longer than their parents, those additional years will require careful planning if they want to live comfortably.
“This longevity is not without its downsides,” McCrindle says. “Just because a generation has seen improvement in the length of life, doesn’t mean there will be improvement in the quality of those additional years.” This includes, he estimates, the average median capital city house price costing $2 million by the time this generation begins exiting the workforce.
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So to figure out what you need and the retirement you want, you need to find your own magic number.
The first step in coming up with this is to look at where you’re at right now. This includes taking stock of roughly how many years of work you still have ahead of you, looking at your current superannuation balance, and assessing your other finances – meaning any savings or debts you have.
Once you have a clear picture of where you’re at, the next step is to figure out where you want to be by the time you retire and what your priorities need to be to get there.
Some people, for example, might be comfortable retiring with a smaller amount of superannuation and an outstanding amount on their mortgage because they’re planning to downsize, which comes with the potential to axe that debt and give your super balance a boost. Others might be planning to undertake a lot of travel in the first 10 years of retirement, meaning they’ll need to have more tucked away in savings.
When you’re doing these calculations, a helpful way to think of it can be like your income progression in reverse. For example, most of us earn the least in our 20s, more in our 30s, and the most in our 40s or 50s.
In retirement, applying a one-size-fits-all salary to two or three decades won’t work because our spending habits at 65 are likely to be very different to those of when we’re 80. So, you can assume you’re likely to spend a bit more in the first five or so years of retirement enjoying things like holidays at first, but know that’s likely to taper off as time goes on.
You’ll also need to factor in that, while some existing costs will either disappear entirely or reduce drastically (goodbye daily commuting fees), other expenses such as healthcare are likely to increase. You may, however, be eligible for pensioner, retiree or seniors discounts as well, which further offset expenses.
But for all the chatter of younger Australians and their finances, there’s one thing they are absolutely nailing, and which will pay dividends for them when it comes to retirement.
According to an ASIC report on Gen Z financial behaviours, nearly one in five (18 per cent) in this cohort are already investing actively in the sharemarket, while nearly one in four (23 per cent) have invested in cryptocurrency.
Now, putting aside my well-known scepticism around cryptocurrencies, what this shows is that younger people are arguably more financially aware and engaged than previous generations. It also suggests that they understand the crucial role that time plays in generating wealth.
Gen Z are becoming more active investors than the generations before them.Stephen Kiprillis
Let’s say, for example, an 18-year-old puts away $20 a week, every week for 50 years before they retire. By the time they get to 68, those deposits will have set them back $52,000 (just $1040 per year), but at an average sharemarket rate of return of 9 per cent, their portfolio will be worth just over $1 million.
Even if you were to invest for just 25 years, by having this kind of nest egg, alongside general savings, property and superannuation, suddenly there’s a lot more freedom and a lot less to worry about.
It also means that, if one area of your investment faces a setback when you go to retire (say property prices take a dive or the sharemarket dips), your entire safety net won’t fall out from underneath you.
With housing prices and interest rates still painfully high and the average first-time homeowners older than ever before, it’s entirely understandable that many people don’t have a clear picture of, or plan for, what their living arrangements will look like in 10, 20 or 30 years from now.
But as I’ve said countless times before, your finances are a long game. Putting essential questions about things like the roof over your head or how you’ll pay for your healthcare in the “too hard basket” is not a solution.
In fact, it’s just allowing that problem to grow and guaranteeing you’ll have to work infinitely harder at a time of life you deserve to be relaxing.
Victoria Devine is an award-winning retired financial adviser, a bestselling author and host of Australia’s No.1 finance podcast, She’s on the Money. She is also founder and director of Zella Money.
Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their personal circumstances before making any financial decisions.
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Victoria Devine is an award-winning retired financial adviser, best-selling author, and host of Australia’s number one finance podcast, She’s on the Money. Victoria is also the founder and managing director of Zella Money.From our partners