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<\/p>\nEvery few months, someone in the superannuation industry declares that Australians now \u201cneed\u201d around A$1 million to retire comfortably. It\u2019s a big, scary number and similar figures get bounced around in New Zealand.<\/p>\n
By Angel Zhong for The Conversation <\/p>\n
But consumer advocates say most people can retire with far less.<\/p>\n
Independent estimates suggest something closer to A$322,000 ($385,000) is enough for many retirees who own their own home. So who\u2019s right \u2013 and what assumptions drive these wildly different targets?<\/p>\n
What the two key benchmarks say<\/p>\n
Two key organisations publish retirement benchmarks in Australia, and they paint very different pictures.<\/p>\n
The Association of Superannuation Funds of Australia (ASFA), the lobby group for the super industry, publishes two lifestyle options in its 2026 Retirement Standard. This was recently updated to reflect a higher cost of living:<\/p>\n
Modest retirement: Covers the basics \u2013 a budget car, basic private health insurance, one domestic holiday a year. This costs around $35,503 a year for a single homeowner, and the age pension (the regular government payment available to eligible retirees aged 67+) covers most of it. You\u2019d only need around A$110,000 in super.<\/p>\n
Comfortable retirement: Includes top-level private health insurance, a newer car, regular dining out, and overseas travel. ASFA puts this at around A$54,240 a year for a single homeowner, requiring roughly $630,000 in super. For couples, it\u2019s about A$77,375 a year, needing around A$730,000.<\/p>\n
These are significant sums \u2013 but well below A$1 million.<\/p>\n
Then there\u2019s Super Consumers Australia, an independent consumer group that recommends a substantially lower amount.<\/p>\n
Rather than imagining a lifestyle, the consumer group uses actual Australian Bureau of Statistics data on what retirees really spend. Its headline finding: a typical single retiree spending at the middle level out of three options needs just A$322,000 in super.<\/p>\n
Remember, retirees don\u2019t have work-related expenses, and they also enjoy a range of discounts on things such as council rates, electricity and medicines, which can really add up.<\/p>\n
Part of the difference is the industry body, ASFA, has an interest in encouraging people to contribute more to their super. Its \u201ccomfortable\u201d standard is higher than most Australians\u2019 standard of living while working.<\/p>\n
Why the numbers differ<\/p>\n
The gap comes down to what each benchmark is measuring.<\/p>\n
ASFA describes an aspirational lifestyle. Super Consumers describes what real retirees actually spend.<\/p>\n
The age pension does a lot of the heavy lifting either way. At Super Consumers\u2019 medium spending level, about 67% of retirement income comes from the age pension, and the remainder from your super balance.<\/p>\n
But here\u2019s a crucial new factor: the age pension isn\u2019t keeping up with what retirees actually spend money on.<\/p>\n
While the pension is indexed to inflation, retirees\u2019 major expenses \u2013 insurance, rates, utilities, health care and food \u2013 have been rising faster than general consumer prices.<\/p>\n
That means retirees who rely heavily on the pension are seeing more financial pressure than the headline inflation numbers suggest.<\/p>\n
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Mortgage debt has tripled since 1990, and the average debt for the 55-64 age group now exceeds A$230,000. (Khafizh Amrullah)<\/p>\n
There\u2019s a housing catch<\/p>\n
Here\u2019s the crucial fine print: every one of these benchmarks assumes you own your home outright when you retire.<\/p>\n
That assumption is becoming shaky. Research shows the share of Australians aged 55\u201364 still carrying mortgage debt has tripled since 1990, and the average debt for that age group now exceeds A$230,000. More than one in three Millennials expect to retire with a mortgage still running.<\/p>\n
The ASFA budgets are built on the assumption of full home ownership. That means they do not include rent, mortgage repayments or major housing costs.<\/p>\n
If you\u2019re renting or carrying a mortgage into retirement, the required super balance can rise dramatically. ASFA estimates renters need A$340,000\u2013A$385,000 for a modest lifestyle \u2013 more than a homeowner needs for a comfortable one.<\/p>\n
Super Consumers Australia presents a similar gap, estimating that a renter requires about A$659,000 in superannuation, compared with only A$322,000 for a homeowner.<\/p>\n
With more people retiring with mortgage debt today than previous generations, both key benchmarks may underestimate housing-related stress for future retirees.<\/p>\n
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Older person working on a laptop (file photo) (Source: istock.com)<\/p>\n
The gender gap in retirement<\/p>\n
Retirement targets are often discussed as if everyone starts from the same position. They don\u2019t.<\/p>\n
Australian women retire with about 25% less super than men. The gender pay gap (currently around 21%) compounds over a working life into a much larger retirement savings gap. Women also live longer on average, meaning their money needs to stretch further.<\/p>\n
The government began paying super on parental leave in July 2025 \u2013 a meaningful step forward. But the gap remains significant.<\/p>\n
What this means for you<\/p>\n
There\u2019s no single right number. But ask yourself these questions before chasing any benchmark:<\/p>\n
– Will you own your home outright?<\/p>\n
– Do you want to travel or are you a homebody?<\/p>\n
– Are you planning for one income or two?<\/p>\n
The gap between ASFA comfortable and Super Consumers medium is A$8,497 a year in spending \u2013 but nearly A$308,000 in required super. That difference is almost entirely lifestyle choice.<\/p>\n