It is the hottest question – how much is enough?
There can never be a one-size fits all answer, but a widely accepted benchmark is 65% of pre-retirement living income.1
No matter what your age, work out how much you think you’ll need in retirement. It is likely you’ll dramatically increase your retirement savings if you have a target figure.
In retirement, most people picture themselves relaxing and doing things they've only dreamed about during their working lives. Super is vital for funding a comfortable retirement lifestyle – the super contributions you make now will influence the lifestyle you’ll lead in retirement.
Let’s look briefly at three retirement standards. Currently the Commonwealth Government provides an age pension, which is subject to income and asset tests. Depending on the results of these tests, you may receive an age pension of up to $14,367 per year for singles, and $23,904 per year for couples combined – hardly enough for a lavish lifestyle. In order to achieve the retirement lifestyle you want, super is vital in supplementing, or even replacing, the age pension.
The table below includes two other retirement standards – modest and comfortable.
| Measures of retirement standards |
Single |
Couple |
| Centrelink age pension 2 |
$14,367 |
$23,904 |
| Modest lifestyle 3 |
$19,399 |
$27,151 |
| Comfortable lifestyle 3 |
$37,452 |
$50,086 |
How much you’d like to live on per year in retirement?
The most important calculation is to work out what savings you’ll need. Use QSuper’s Super health check calculator. It will help you calculate what your final benefit may be using your current salary and projected investment growth, and also what effect factors such as delaying retirement or altering your investment preference can have on your end result.
Consider these factors.
- How your investments perform - inflation, interest rates, the performance of investment markets, and your choice of investments will influence how long your money lasts.
- How you live in retirement - obviously, if you plan an international cruise each year, you'll need more money than if you travel intra or interstate. You choose your lifestyle, but you'll need the finances to support it.
- When you retire - the earlier you retire, the longer your super needs to support you. Some people choose to stay at work longer, or choose to work part-time before retiring so their super doesn't have to last as long.
- How long you live for - Australians are living longer. On average, a 65-year-old retiree lives for another 18-21 years. Many will live even longer. Use our Life expectancy calculator to see how long you may live – and then add a few years to be on the safe side!
When thinking about your retirement income, if you want to retire before age 60, it's important to consider special tax concessions and discounts provided by the Commonwealth Government. Income paid from super funds is taxed at lower rates than income earned through employment, and if you are over age 60, your benefit is paid tax-free!