Forget the magic number you read in the news. The honest answer involves your lifestyle, your debts, your longevity, and what you actually want to do with the next 25 years.
Every few months a headline pops up: "Australians need $1.5 million to retire." Or $900,000. Or $2 million. The number changes depending on which bank or super fund commissioned the survey.
Most of these headlines are well-meaning but unhelpful. They take an average lifestyle assumption, project it forward, and generate a single dollar figure that's supposed to apply to everyone. Real retirement planning doesn't work that way. The right number for you depends on five things — and "average" is rarely one of them.
The most reliable benchmark in Australia is the ASFA Retirement Standard, updated quarterly. The latest figures suggest:
"Comfortable" here means owning your own home outright, having private health insurance, eating out occasionally, taking a domestic holiday once a year and an overseas trip every few years, and being able to replace a car when it dies. It's not luxurious — it's the version of retirement most Australians say they actually want.
To fund that level of spending until age 92 (a reasonable life-expectancy assumption), and assuming you'll qualify for at least a part Age Pension, ASFA estimates you need a starting balance of roughly:
Less than the headlines suggest. Why? Because the Age Pension picks up a meaningful share of the income for most retirees, and the calculation assumes your money keeps growing while you draw it down.
The ASFA numbers assume you own outright. If you're still renting at retirement, add roughly $25,000–$35,000 per year to your income requirement, every year, for the rest of your life. That can mean an additional $400,000–$600,000 of starting capital.
Increasingly common. If you'll still owe $200k on the home at age 65, your first decision is whether to clear it from super at retirement (one-off lump sum) or pay it down progressively. Either way, that debt is a drag on what's available for living costs.
"Comfortable" by ASFA's definition might be more or less than what you have in mind. If you want to take an overseas trip every year, run two cars, support an adult child, or maintain a holiday house, the budget needs to reflect that.
The most useful exercise: write down what your monthly spending in retirement actually looks like. Mortgage or rent. Utilities. Groceries. Petrol. Insurance. Subscriptions. Eating out. Travel. Gifts. Health. Then multiply by 12. That's your real number.
A 65-year-old Australian has a life expectancy in the mid-to-late 80s, but a meaningful chance of living into their 90s. Plans that assume you'll die at 80 leave a lot of risk on the table. Most modelling now plans for at least to age 92 — and for couples, the survivor's longevity matters most.
Some clients want to spend their last dollar on the day they die. Others want to leave a meaningful inheritance to children, grandchildren, or a charity. The two strategies look very different. The "spend it down" version needs less starting capital. The "leave a legacy" version needs more — or needs to be structured so the home or other assets pass through the estate intact.
For most Australian couples planning a comfortable, home-owning retirement to age 92, with a part Age Pension, somewhere between $700,000 and $1.5 million in combined super at age 65 puts you in the right zone. Singles, somewhere between $500,000 and $900,000.
Wide ranges, deliberately. The right answer for you will be a single number, and it'll come from a proper modelling exercise that takes your real spending, your real assets, your real debts, and your real life expectancy into account.