Australians now need a superannuation balance of $630,000 for a single person or $730,000 for a couple to fund a “comfortable” retirement, according to the Association of Superannuation Funds of Australia (ASFA). Driven by inflation and rising costs for essentials like electricity and fuel, these targets have climbed by up to $4,691 over the past year. While many younger Australians fear they need over $1 million to retire, industry experts suggest these projections often overlook the lower cost of living associated with post-work life.
How much do you actually need to retire?
To maintain a “comfortable” standard of living, ASFA reports that single retirees require $55,932 annually, while couples need $78,566. This standard assumes retirees can afford private health insurance, occasional restaurant meals, and annual domestic holidays. For those unable to reach these superannuation thresholds, a “modest” retirement—focused on basic essentials—requires significantly less: $110,000 in savings for a single person and $120,000 for a couple, supplemented by the Age Pension.
The Australian Bureau of Statistics (ABS) reports that electricity costs have surged by 25.4% and automotive fuel by 24.2% over the last year, placing significant pressure on fixed-income households.
Why are retirement expectations so high?
Despite the official benchmarks, many Australians harbor significant anxiety about their future savings. ASFA data indicates that 51% of Australians aged 25 to 34 believe they need over $1 million to retire comfortably. ASFA CEO Mary Delahunty notes that this reflects “cost-of-living pressures” today being projected into the future. However, Delahunty points out that retirement generally costs less than working life, as many expenses related to employment and child-rearing disappear.
How does the housing crisis change retirement planning?
The traditional path to a comfortable retirement—being mortgage-free by age 67—is becoming less common. According to ASFA, the assumption of home ownership is increasingly fragile for younger generations. Data from Finder shows that house prices have jumped from 3.3 times the average annual income in 1984 to 10 times that figure in 2025. For renters, the savings required for a “moderate” retirement climb significantly to $340,000 for a single person and $385,000 for a couple, as they must account for ongoing housing costs.
The Australian government’s Moneysmart retirement planner allows you to input your current age, salary, and super balance to estimate how long your funds might last based on your specific lifestyle goals.
Recommended savings milestones by age
To reach the $630,000 target by age 67, ASFA suggests specific benchmarks for those earning a $100,000 pre-tax salary. These milestones assume continuous employment without career breaks:
- Age 40: $98,000
- Age 50: $248,000
- Age 55: $342,000
- Age 60: $449,500
Frequently Asked Questions
Does the “comfortable” retirement figure include the Age Pension?
Yes. The ASFA figures are based on a combination of superannuation drawdowns and, where applicable, the Age Pension. The balance targets assume the retiree owns their own home.
Why do my savings expectations differ from official figures?
Many Australians overestimate their needs because they project current, high-inflation living costs into a future where they will no longer have work-related expenses or mortgage repayments, according to ASFA CEO Mary Delahunty.
What happens if I don’t reach the “comfortable” target?
You can still achieve a “modest” retirement. This standard covers basic needs—including health insurance and utilities—but requires less capital, relying more heavily on the Age Pension to cover day-to-day costs.
Are you on track with your retirement goals? Use the government’s online tools to check your progress and consider speaking with a financial adviser about your specific circumstances. Subscribe to our newsletter for more updates on cost-of-living trends.
