How much money do you really need to retire in Australia?
If you’re planning to retire in the next few years, no doubt you’re asking the question, “How much do I really need?” You might be thinking: Is $500,000 enough? What about $1 million?
But before you ask that question, we need to take a step back and start with: What will I spend?
This is your starting point.
Your retirement plan will look very different if you need $50,000 a year compared with $120,000. Until you understand your spending — your realistic spending — it’s pretty much impossible to know how much money you need, and whether you’re on track.
So, how much does a comfortable retirement cost?
The Association of Superannuation Funds of Australia (ASFA) publishes the ASFA Retirement Standard, which gives us a useful benchmark for what a modest or comfortable retirement might cost.
Based on the June quarter of 2026, ASFA estimates that a comfortable retirement costs around:
- $56,166 a year for a single person.
- $78,998 a year for a couple.
For comparison, a modest retirement is estimated to cost $36,548 a year for a single person and $52,690 for a couple.
These figures assume you own your home and relate to retirees aged 65 to 84. ASFA updates its estimates quarterly to reflect changes in living costs.
They’re useful benchmarks, but they aren’t magic numbers that work for everyone. They’re based on a pretty specific set of assumptions about lifestyle and circumstances, including home ownership. When I see clients, they rarely fit neatly into one of the categories.
Your version of a comfortable retirement might involve regular overseas holidays, helping the kids out financially or finally having the time to enjoy the things you’ve put off while working. Or you might want a simpler lifestyle.
The point is, the only way to work out how much you need for your retirement is to understand what you want your retirement to look like and what it’s likely to cost.
So, where do you start?
Start with your current spending
Look at your bank statements and work out where your money goes. Your banking app might categorise your spending automatically, but be warned: it’s not perfect, so you’ll probably need to check the figures and make adjustments.
Group your expenses into three categories:
- Regular living costs: Groceries, utilities, insurance, transport, rates and other household expenses.
- Lifestyle spending: Holidays, eating out, hobbies, entertainment and the things you want to enjoy in retirement.
- One-off expenses: Replacing a car, renovating the house or helping children and grandchildren financially. This could also include one-off goals such as a big purchase or paying off debt before retirement.
That last category is easy to overlook. You might have enough money to cover your usual day-to-day bills, but we can’t forget about the big expenses that don’t come up very often.
Build a retirement budget, not just a copy of today’s
The first step was getting an idea of today’s spending, which is important. But your spending will probably change when you stop working.
Some costs might fall. You may no longer commute to work or need to maintain a work wardrobe. Other costs will probably go up, particularly if you have more time for travel, hobbies or general activities.
Start with your current budget, duplicate it (yes, we’re imagining an Excel spreadsheet, but whatever method you want to use will work) and create a retirement version. Add or subtract the expenses you expect to change, then add the bigger purchases or experiences you want to fund.
Be realistic about the lifestyle you want. One of the biggest risks to funding your retirement is underestimating what it will cost.
Work out where the money will come from
Once you have an idea of what you’ll spend, we need to work out where the money will come from.
This is where you can start looking at how to fund it.
Your retirement pool might include superannuation, cash savings, shares and ETFs, rental income or proceeds from selling an investment property or even downsizing your home. Each comes with different considerations, including access, investment risk, ongoing costs and potential tax consequences.
You also need to consider when you’ll be able to access your super and whether you may qualify for the Age Pension in the future.
The goal here is to work out which assets will help fund the amount you need, and when you’ll have access to them.
For example, if you want to retire at 58 and can’t access your super until 60, you’ll need money elsewhere to fund that gap.
Get your plan on one page
List your super balances, savings, investments, property values and debts. Include any other assets or financial commitments that could affect your plans.
Seeing everything together can help you identify what you own, what you owe and what still needs attention. It also gives you a clearer starting point for working through different retirement scenarios.
There’s no single super balance that guarantees a comfortable retirement. Your spending, assets, debts, timing and plans all matter.
Start with what your money needs to do for you. Then work out whether your financial position can support it.
Want help working through your retirement numbers?
If you’re getting closer to retirement and want to get your head around the numbers, the Rask Retirement Academy is designed to help you do exactly that.
I’m one of the instructors in this online course, which walks you through key decisions involved in preparing for retirement, including budgeting, understanding your super, planning retirement income and getting across government support.
You’ll also have access to tools and calculators to help you work through the numbers and build a clearer picture of your own retirement.
Explore the Rask Retirement Academy and start planning for the retirement you want.
You can also hear more from me in the Australian Retirement Podcast episode “Retiring in 2027? 5 decisions to make before you stop work”.
Or if you know you need financial advice, we’d love to help, so reach out to us at Rask Advice.
This article contains general financial information only and does not take into account your objectives, financial situation or needs. Consider your own circumstances and seek personal advice before acting on anything discussed.
