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How much superannuation do you need to retire in Australia?

Everyone wants to know how much money they should have in their super account before they retire. While there’s no magic number, there are ways to estimate how much superannuation you might need and what type of retirement lifestyle you can look forward to. 

Superannuation withdrawal at retirement

Once you’ve met a condition of release (e.g. reached 65, or reached your preservation age and retired), you’ll be able to access the funds in your super account. You can either withdraw a lump sum amount and/or commence an income stream. The Australian Tax Office (ATO) website has more information on preservation age and conditions of release.

A lump sum withdrawal is a one-off payment from your super where you can withdraw some or all of your funds. If you’re over 60, lump sum withdrawals are generally tax-free, however it means your money will no longer be invested in super where it could continue to grow.

Alternatively, you’re able to convert your super account to an income stream where you’ll receive periodic payments. You can choose how much you want these payments to be, based on what you estimate is needed to fund your day-to-day living. While there’s a minimum percentage you have to withdraw from your pension account each year, based on your age (see the current percentages here), it does mean your money can stay invested in your account while you receive these payments.

Income stream products include:

  • Transition-to-retirement (TTR) accounts – available if you’ve reached the preservation age, are under 65, and have decided to continue working. Your balance is invested in markets, including assets like shares and bonds.
  • Account based pensions – available if you’ve reached the preservation age and retired, or once you’ve turned 65. Your balance is likewise invested in markets.
  • Account based annuities – available if you’ve reached the preservation age and retired, or once you’ve turned 65. You can purchase an annuity from a super fund or life insurance company, which provides a guaranteed income regardless of how markets perform.

How much super do I need for the retirement I want?

What type of life do you see yourself living in retirement? Do you want to take overseas holidays and fill your days with lot of leisure activities, or will you be satisfied with a quieter, simpler life? The more you plan to do with your retirement, the more money you’ll need to fund your lifestyle.

The best measure for how much money you might spend in retirement comes from the ASFA Retirement Standard. Published quarterly, these figures estimate your annual budget and what super balance you might need when it comes time to retire.

For the September 2023 quarter, ASFA estimates that you will need to have this much in your super to retire at age 67 (the current retirement age in Australia):

  • Super balance of $100,000 for a ‘modest’ lifestyle (same amount for a single person or a couple)
  • Super balance of $595,000 for a single person or $690,000 for a couple for a ‘comfortable’ lifestyle

Head to AFSA’s Retirement Standard Summary to compare the characteristics of a modest and comfortable lifestyle. Keep in mind that these figures assume that you receive the Age Pension both immediately and into the future.  The Age Pension is a government payment to support your basic living, if upon retirement your assets (such as super) and income are below a minimum amount. Services Australia has more information on eligibility for the age pension. 

You can use the Moneysmart superannuation calculator to estimate your super balance at retirement.

If you don’t think you’ll have enough money in your superannuation when you retire, you might want to consider topping up your account from time to time. Every extra dollar you add to your account now will make a difference to your super balance when you retire.

Estimate your superannuation balance at retirement  

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Things you should know

This is general advice only. It does not take your personal objectives, financial or taxation situation or other needs into account. Before acting, you should consider the appropriateness of the advice, having regard to your objectives, financial situation and needs.

Avanteos Investments Limited ABN 20 096 259 979, AFSL 245531 (referred to as Colonial First State, CFS, ‘we’, ‘us’ or ‘our’) is the Trustee of Essential Super ABN 56 601 925 435 and the issuer of interests in Essential Super. Essential Super is distributed by the Commonwealth Bank of Australia ABN 48 123 123 124, AFSL 234945 (the Bank). The CFS Group consists of Superannuation and Investments HoldCo Pty Limited ABN 64 644 660 882 (HoldCo) and its subsidiaries, which includes CFS. The Bank holds an interest in the CFS Group through its significant minority interest in HoldCo.

This information is issued by CFS and may include general financial product advice but does not consider your individual objectives, financial situation, needs or tax circumstances, and so you should consider the appropriateness of the advice having regard to your circumstances before acting on it. The Target Market Determination (TMD) for Essential Super can be found at cfs.com.au/tmd and includes a description of who the financial product is appropriate for and any conditions on how the product can be distributed to customers. You should read the Product Disclosure Statement (PDS) and the Reference Guides for Essential Super carefully and consider whether the information is appropriate for you before making any decision regarding this product. Download the PDS and Reference Guides at commbank.com.au/essentialsuper-documents or call us on 13 4074 for a copy. 

None of the Bank, HoldCo, CFS, nor any of their respective subsidiaries guarantee the performance of Essential Super or the repayment of capital by Essential Super. An investment in this product is subject to risk, loss of income and capital invested. An investment in Essential Super is via a superannuation trust and is therefore not an investment in, deposit with or other liability of the Bank or its subsidiaries. 

The insurance provider is AIA Australia Limited ABN 79 004 837 861, AFSL 230043 (AIA Australia). AIA Australia is not part of the Commonwealth Bank Group or CFS. Insurance cover is provided to eligible members of Essential Super under policies issued to CFS.

Any information provided by CBA may include general financial product advice but does not consider your individual objectives, financial situation, needs or tax circumstances, and so you should consider the appropriateness of the advice having regard to your circumstances before acting on it.  You should read the PDS and the Reference Guides for Essential Super carefully and consider whether the information is appropriate for you before making any decision regarding this product.