How much super do I need to retire?

More time to travel, to relax and spend on hobbies—it can be exciting preparing for what could be the longest holiday of your life. But deciding how much super you’ll need to suit your retirement lifestyle can be less thrilling. The amount will differ depending on your circumstances, but there is a guideline you can follow so you can get on with planning the more fun things.

I want to retire comfortably

Meals out, regular entertainment, fitness classes, a reasonable car, and top-level private health insurance. Add to that an annual domestic trip and an international trip once every seven years. This is what a comfortable retirement can look like says the Association of Superannuation Funds of Australia (ASFA).

If this lifestyle suits you, the recommendation is by age 67 couples have saved $690,000 and singles $595,000*.

I want to retire modestly

A modest retirement is less grand with spending being slightly above the Age Pension. This might look like an older model car, basic health insurance, occasional trips to the cinema or a cheap eat, and an annual short break.

For a modest retirement ASFA recommends that at age 67 both couples and singles have saved $100,000*.

See if your super balance is on track

Using the Retirement Income Calculator is a great way to see if you’re on track for the future. It can provide you with an estimate of your super balance at retirement, and help you understand the actions you could take to achieve the lifestyle you want.

You can use tax effective ways to build your super

If you think your super could do with a boost, here’s some tax effective ways to save for the future.

1. Contribute more by salary sacrificing
   Contributions made from your before-tax salary are taxed at only 15% instead of your marginal tax rate (if you earn under $250,000 per year). There is a concessional contribution cap of $27,500 that you have to keep in mind and there may be additional tax if you exceed your limit. 
2. Think about using your non-concessional cap
   Until the age of 75 you can make non-concessional contributions from your after-tax salary, your savings, or a money windfall. You can contribute up to $110,000 tax free in a financial year this way, or $330,000 if you use the bring forward rule.
3. Consider a downsizer contribution
   Once you’ve turned 55 you can downsize your home and contribute up to $300,000 of the proceeds to your super tax free.
4. Start a transition to retirement (TTR) strategy
   Once you’ve turned 60 you can start a TTR. This can be a great way to build your balance when you’re closer to retirement as it allows you to still work full-time, make extra contributions and benefit from tax concessions.

Your retirement dreams are our priority

As a CareSuper member you have access to financial advisers who can provide super specific advice over the phone, at no extra cost to you. We can help you with:

• The best ways to boost your super so you can live your best life after work
• Making sure you're in the right CareSuper investment option
• Helping you understand if you're on track for retirement.

If you need more complex advice, then our team of comprehensive financial advisers are available. We'll consider your whole financial situation, including your spouse, any assets you have outside super, your debts and your financial goals to help you plan your ideal retirement.

We can’t wait to hear from you

At CareSuper we only exist to support you, our members in achieving your retirement dreams. So, if you’re lying awake at night wondering how and if you can afford life after work, please give us a call. We can’t wait to hear from you. Give us a call on 1300 360 149.

Information correct as at 14 November 2023.

¹ Association of Superannuation Funds of Australia Limited (ASFA) Retirement Standard, December quarter 2022 All figures are in today’s dollars using 2.75% AWE as a deflator and an assumed investment earning of 6 per cent.
^*The ASFA retirement standard assumes people own their home outright, are relatively healthy, will draw down all their capital and receive a part Age Pension.