How Much Superannuation Do Australians Really Need for Retirement? It Might Be Less Than You Expect

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Australians on a median wage will be able to retire in a good financial position, according to the peak body for the superannuation industry.

The Association of Superannuation Funds of Australia (ASFA) projects a 30-year-old with a super balance of $30,000, earning the median wage of $75,000 until retiring at age 67, should accumulate $610,000 in super.

This exceeds the figure ASFA says is needed for a “comfortable” retirement, which it estimates requires $595,000 in super for a single person living in their own home.

A homeowner couple needs $690,000 in superannuation to reach the same level of financial security,

It is the first time the body has predicted that someone on the median wage will reach that financial goal, since its reporting started in 2004.

But experts say it may take even less in superannuation to have a secure retirement, especially if you own your own home.

What do the numbers show?

The ASFA retirement standard breaks down the cost of retirement, examining health insurance, basic living expenses, and other essential costs.

According to estimates for the March 2025 quarter, a household with a ‘comfortable lifestyle’ — including a reasonable car, health insurance and an overseas trip — spends $73,875 per year for a couple who own their home and about $52,383 for a single homeowner.

In contrast, those living a ‘modest lifestyle’, the estimated annual budget was approximately $15,000 lower for singles than for couples living in their own home, typically spending less on health insurance, cars, and taking fewer holidays, among other expenses.

While for renters living a ‘modest lifestyle’, a couple was estimated to have spent $64,259 and a single person $46,663 annually.

Someone on the age pension is estimated to spend $29,024 per year, and a couple $43,753, with both figures including supplements.

A chart illustrating budgets for various households and living standards among individuals aged 65-84.

According to estimates for the March 2025 quarter, a household with a ‘comfortable lifestyle’ spends $73,875 per year for a couple who own their home and about $52,383 for a single homeowner. Source: SBS News

ASFA CEO Mary Delahunty attributed the rise in retirement affordability to higher super contributions.

From July, employers will be required to pay 12 per cent of their employees’ wages in superannuation, an increase of 0.5 per cent.

“With the 12 per cent super guarantee coming in, we can now say that the system foundations are cemented for young, working people to have a comfortable retirement. It’s a moment all Australians should be proud of,” Delahunty said.

Homeowners better off than renters

Joey Moloney, the deputy director of the housing and economic security program at the Grattan Institute, told SBS News the real cost of retirement could be even lower, as retirees typically spend less once they stop working.

“When you look at people’s spending habits from pre-retirement to post-retirement, what you see is that people spend less in retirement and increasingly so as retirement goes on,” he said.

“Pensioners benefit from a bunch of discounts on council rates, electricity, medicines and other benefits that add up to an implicit income of thousands of dollars a year.”

For people who have paid off their mortgage, they could have an extra 30 per cent of their income freed up rather than going into repayments, Moloney said.

He said most people who own their own homes would have a secure retirement, but the situation is different for renters.

“What the data shows is that renters in retirement are actually typically doing it tough. Poverty rates are pretty high, and levels of reported financial stress are pretty high.”