How much super do you really need?

Retirement probably feels like a lifetime away right now. But whether you’re just starting out or you’re halfway through your career, knowing how much super you might need – or want – later on can help you make smarter choices now.

Working out the ‘right’ super balance will depend on your lifestyle goals, when you plan to retire, and how long you expect your retirement to last. 

If you’re aiming for a higher retirement income – say $90,000 to $100,000 a year – you’ll need more like $1.3 million to $1.6 million at age 67, which should last a single person until age 92.²

While you can generally access your super from age 60, the age that you retire matters when considering how much super you’ll need. Here are some things to keep in mind:

• Your retirement age affects how much super you'll need. The earlier you retire, the longer your super needs to last. Retiring at 60 instead of 67, for example, means funding an extra seven years of living expenses. That could mean needing hundreds of thousands more in your super balance.
• The Age Pension doesn’t kick in until age 67. So if you retire before this, you’ll need to rely solely on your super and other savings.
• The earlier you retire, the less time your super has to grow. This is because you stop contributing to your super sooner (through employer contributions, for example), and miss out on the compounding returns that build up over time.
• Inflation can also erode your purchasing power over time, so your retirement plan needs to build this in. 

Once you’ve thought about when you want to retire, the next step is to think about how long your savings will need to last.

When planning for retirement, it’s not just about when you’ll stop working but how long your retirement may be.

On average, a 65-year-old man can expect to live another 20 years, and a 65-year-old woman another 23. But averages are only the middle of the story – around half of the population lives longer than this.³

That’s why most retirement calculators assume you’ll live to 92 or beyond, just to play it safe. That way, their estimates are based on your super lasting throughout  retirement.

So if you retire at 65, your super may need to cover at least 20 years of everyday costs, medical bills, and fun stuff. 

Our handy super and retirement projection calculator makes it easy to check. Just enter a few details – like your age, income and super balance – and you’ll get a snapshot of how your super’s tracking, and how long it will last in retirement. It can also help you understand how your retirement age, additional contributions and investment choices can make a difference.⁴

For a quick snapshot, ASFA’s Super Detective has crunched the numbers to work out what your super balance should look like at different ages if you’re hoping to retire at age 67 with a balance of $595,000.⁵

But this is just a guide. Your actual needs will depend on your lifestyle, health, and housing situation.

If your current super balance isn’t where you’d like it to be, don’t panic. There are practical steps you can take to improve your retirement outlook.

Make extra contributions. Even small top-ups can add up over time. Learn more about making voluntary contributions here.

Review your investment options. Your investment mix can impact your long-term returns. Read more about the factors you might need to consider when choosing your investment options.

Extend your working years. Delaying retirement by even a few years reduces the number of years you’ll need to fund and gives your super more time to grow.

Ease into retirement. Working part‑time or gradually cutting back your hours means you can keep earning income as you move into retirement. If you’re 60 or older (or getting close), you may be able to start a transition to retirement (TTR) pension – like a Hostplus TTR account – while you’re still working. This could help boost your super without reducing your take-home pay. Consider getting financial advice first, though, as the rules and tax implications can be complex. 

Keep reviewing your retirement plan, because life happens, markets
move, and your goals may change. That’s why it’s important to review your super plan, investment strategy, and insurance regularly, especially as you get
closer to retirement.

Everyone’s retirement number is different. The good news is, you don’t have to figure it out alone.

Whether you’ve just started your first job or you’re close to retirement, we can help you reach your financial goals. And the best thing is, we have a range of advice options to make sure you get the right level of advice to suit your changing needs.

Contact us on 1300 303 188, email us, or book a callback today.