How much do I really need to retire? (And do I need $1 million?)
6 July 2026
Somewhere along the way, $1 million became the unofficial benchmark for a comfortable retirement. But the reality is, many Australians retire comfortably on significantly less, especially when the Age Pension is part of the picture.
The truth is, there’s no single “right number.” What you’ll need depends on your lifestyle, your super, and your eligibility for government support. The key is understanding what your retirement might look like and what it will cost.
What does a ‘comfortable’ retirement actually cost?
The Association of Superannuation Funds of Australia (ASFA) Retirement Standard is a widely used benchmark that estimates how much Australians need each year for a ‘comfortable’ or ‘modest’ lifestyle in retirement.
| Comfortable lifestyle (homeowner) | Modest lifestyle (homeowner) | Modest lifestyle (renters) | Age Pension (per year) |
|
| Single | $55,923 | $36,434 | $51,164 | $31,223 including supplements |
| Couple | $78,566 | $52,473 | $69,002 | $47,070 including supplements |
March quarter 2026
In terms of super balance, this translates to a lump sum of around $630,000 (single) or $730,000 (couple) at retirement age for homeowners. The important thing to understand is that these figures are designed to work alongside the Age Pension, not replace it. It's the combination of the two that delivers a comfortable retirement income. While they're useful reference points, they're averages, not prescriptions. Your actual number will depend on the factors below.
Think of these numbers as a guide, not a rule. Your own “magic number” will depend on a few key factors.
To learn more about how your super and Age Pension works, click here.
The factors that shape your number
1. When you plan to retire
There’s no fixed retirement age. You can generally access your super from 60, while the Age Pension starts at 67.
Retiring earlier means your savings need to last longer and bridge the gap before any pension kicks in. Timing can have a big impact on how much you’ll need.
2. What your life actually costs
Benchmarks are based on averages, but your life isn’t average. You might want to travel more, spend less, support family, or plan for healthcare costs.
The closer your estimate reflects your real lifestyle, the more useful it becomes.
3. How long your retirement may last
At 65, Australians can expect to live another 20–23 years on average and often longer. If you retire earlier, that’s even more years to fund.
According to the Australian Bureau of Statistics (ABS), a 67-year-old Australian can expect to live another 19 years if male, and another 22 years if female1. That's potentially two decades or more of retirement still ahead.
A retirement that could last decades needs a plan that will go the distance.
4. Your super balance (and how it’s structured)
Not all super works the same way. With Triple S, for example, tax is generally applied when money leaves the fund rather than while it’s building.
This can make your balance look higher now but it’s important to remember that the amount you see isn’t exactly what you’ll receive after tax. Your final outcome will depend on your age and how you access your super
For members aged 60 or over, tax of 15%2 generally applies to the taxable untaxed component. For those accessing super between 55 and 59, a higher rate of up to 30%2 may apply. The exact amount depends on your age, how you access your super, and your personal tax situation.
You can call our Member Services team to help you understand what your balance may look like after tax is taken into account.
1Australian Bureau of Statistics, Life Tables 2022–2024
2The Medicare Levy of 2% may also apply. Amounts above the untaxed plan cap will be taxed at 45% plus the Medicare Levy.
Three ways to work out what’s right for you
There’s no one-size-fits-all formula but these approaches can help you find a number that fits your life.
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1.Start with the ASFA benchmark
Use the ‘modest’ and ‘comfortable’ standards as a guide. They can help you sense-check whether you’re in the right range.
Use our Hitting the Target Calculator to help you understand your ideal lifestyle and what yearly income you will need to fund it.
2. Use a percentage of your current income
A common rule of thumb is that you’ll need around 60–80% of your current income in retirement. That’s because some costs like commuting, super contributions and possibly your mortgage often reduce or disappear once you retire.It's worth thinking about this in terms of your take-home (after-tax) pay rather than your gross salary. The good news is that many retirees pay little or no tax in retirement, particularly those drawing income from a super income stream. Once you're over 60 and taking an income from your super, that income is generally tax-free – which means your retirement dollars can go further than you might expect.
Calculate how much super you’ll have at retirement with our Retirement Income Calculator
3. Build a budget around your life
The most personalised approach is to map out your expected expenses.
Consider:
- Essentials (housing, food, utilities, health)
- Lifestyle choices (travel, hobbies, family support)
- Costs that will drop away (work expenses, commuting)
Add it together, and you’ll have a realistic income target based on your life and not someone else’s averages.
Create your budget with MoneySmart’s Budget Planner
Putting it into practice: Jenny’s story
The following is a fictional example for illustration purposes only.
Jenny (58) is a nurse earning $85,000 a year, with a current Triple S balance of $280,000. She owns her home and plans to retire at 67. Her retirement picture is simple: some domestic travel, time with family, and the freedom to slow down.
When Jenny budgets her expected retirement expenses, she lands on $52,000 a year. That’s right in line with the ASFA comfortable standard. When she compares it to her actual take-home pay of around $68,700, the gap looks much more manageable at just $16,700 a year. And she won't be covering that entirely from her super. Jenny expects to qualify for a partial Age Pension at 67, which will do some of that heavy lifting.
Knowing what she wants to spend is only half the picture. The real question is what she needs to have saved by 67 to make it happen.
To work that out, Jenny uses the Super SA Retirement Income Calculator. It takes her annual income target, her expected balance at retirement, and her likely Age Pension entitlement to give her an actual lump sum figure to plan toward. It also shows her how long that money could last.
Your retirement planning checklist
- Refer to the ASFA Retirement Standard as a starting point. Decide whether modest or comfortable more closely matches your picture.
- Try the income replacement approach. 60–80% of your current income is a useful ballpark.
- Build your own budget using a tool like MoneySmart's free Budget Planner
- Work out how much super you’ll need at retirement and what your income could be with our Retirement Income Calculator
- Discover your ideal retirement lifestyle and how much money you'll need each year to achieve it with our Hitting the target calculator
- Register for our Super SA Retirement Income Seminar
- Consider speaking with a licensed financial planner with experience in public sector super.
Retirement isn’t about hitting a single number, it’s about understanding what matters to you and building a plan around it.