How Much Super Do I Need to Retire in Australia 2025?

If you're asking "how much superannuation do I need to retire?", you're not alone. This is the most common question Australian pre-retirees face, and the answer isn't as simple as a single number.

The amount of super you need depends on multiple factors: your desired lifestyle, whether you're single or a couple, your expected Age Pension eligibility, and how long you expect to live. Let's break it down.

The ASFA Retirement Standard (2025-26)

The Association of Superannuation Funds of Australia (ASFA) publishes annual retirement standards that provide a benchmark for "comfortable" and "modest" retirement lifestyles.

Comfortable retirement includes private health insurance, a reasonable car, good clothes, a range of electronic equipment, domestic and occasional international travel.

Modest retirement covers basic activities with limited discretionary spending. Think basic transport, limited holidays (mainly domestic), and occasional leisure activities.

How Much Super Do You Need? The Numbers

For a Comfortable Retirement

Based on the ASFA standard and assuming you qualify for a part Age Pension, here are the super balances you'd need at retirement (age 67):

For a Modest Retirement

If you're content with a modest lifestyle and expect to qualify for the full Age Pension:

The Age Pension Impact

Model your own retirement scenario with SuperCalc Pro

The Australian Age Pension is a critical component of retirement income for most Australians. As of 2025-26, the maximum fortnightly Age Pension rates are:

• Single: $1,191 per fortnight ($30,956 per year)
• Couple (combined): $1,777 per fortnight ($46,202 per year)

However, the Age Pension is means-tested. Both your assets and income are assessed, and you receive whichever test results in a lower pension amount.

Age Pension Asset Test Thresholds (2025-26)

For homeowners, the asset test free areas are:

• Single: $327,000 (full pension) to $727,000 (zero pension)
• Couple: $490,500 (full pension) to $1,093,500 (zero pension)

If your assessable assets exceed these limits, your Age Pension is reduced by $3 per fortnight for every $1,000 over the threshold (above the free area).

How super drawdowns and Age Pension combine over retirement

Real-World Examples

Example 1: Sarah, Single Homeowner

Situation: Sarah is 67, single, owns her home, and has $400,000 in super.

Strategy:

• Assets $73,000 over threshold ($400K - $327K) = pension reduced by ~$5,700/year
• Qualifies for part Age Pension (~$25,000/year after asset test)
• Withdraw ~$26,000/year from super to reach comfortable lifestyle
• Total income: ~$51,000/year
• Super lasts approximately 20+ years with conservative 5% returns, then full pension kicks in

Result: Sarah can maintain a comfortable lifestyle. As her super depletes, her Age Pension increases automatically.

Example 2: John & Mary, Couple Homeowners

Situation: John (68) and Mary (66) own their home and have $650,000 combined super.

Strategy:

• Assets $159,500 over threshold ($650K - $490.5K) = pension reduced by ~$12,400/year
• Qualify for part Age Pension (~$34,000/year after asset test)
• Withdraw ~$38,000/year from super
• Total household income: ~$72,000/year (comfortable lifestyle)
• Super lasts approximately 25+ years, then full pension kicks in

Result: John and Mary achieve a comfortable retirement with security well into their 90s.

Example 3: David, Single Non-Homeowner

Situation: David is 67, rents, and has $300,000 in super.

Challenge: Non-homeowners have higher asset test thresholds ($590,000 for singles). David's $300,000 is below this, so he passes the assets test. However, the income test (using deeming) slightly reduces his pension. His $300K is deemed to earn ~$7,700/year ($64,200 at 1% + remainder at 3%), which is ~$2,000 over the $5,668 free threshold.

Strategy:

• Receives near-full Age Pension (~$30,000/year after income test reduction)
• Withdraw ~$18,000/year from super to supplement
• Total income: ~$48,000/year
• After rent (~$15-20K): $28,000-$33,000 for living expenses (modest lifestyle)
• Super lasts 20+ years as a supplement to pension

Result: David maintains a modest lifestyle. His near-full pension provides a secure base, with super providing extra comfort.

Factors That Affect Your Super Needs

1. Life Expectancy

Australians are living longer. Current life expectancy at age 67 is:

• Males: 85 years (18 years in retirement)
• Females: 88 years (21 years in retirement)

Planning to age 90-95 is prudent, especially if you have good health and longevity in your family.

2. Investment Returns in Retirement

Your super doesn't stop growing when you retire. Common retirement investment strategies return:

• Conservative (70% bonds, 30% shares): 4-5% p.a. after fees
• Balanced (50/50 bonds/shares): 5-6% p.a. after fees
• Growth (70% shares, 30% bonds): 6-7% p.a. after fees

Higher returns allow your super to last longer, but come with higher volatility and risk.

3. Inflation

Inflation erodes purchasing power over time. At 3% inflation, $50,000 today will need to be $67,000 in 10 years to maintain the same lifestyle. The Age Pension is indexed to inflation, providing some protection.

4. Healthcare Costs

Healthcare expenses typically increase in later retirement (ages 75+). Budget an additional $5,000-$10,000/year for health insurance, medications, and dental/optical care.

5. Unexpected Expenses

Major home repairs, car replacement, or helping adult children can impact retirement plans. A buffer of 10-15% above your desired income is wise.

Test your retirement plan against real historical market data from 1928 onwards

Common Retirement Planning Mistakes

1. Underestimating Longevity

Planning only to age 80 when you might live to 95 is a recipe for running out of money. Use conservative longevity estimates.

2. Ignoring the Age Pension

Many Australians qualify for at least a part Age Pension. Failing to factor this in leads to over-saving or excessive frugality in retirement. Read our complete guide to the Age Pension asset test to understand the current thresholds and how to maximise your entitlement.

3. Withdrawing Too Much Early

Taking large amounts in the first years of retirement (for travel, renovations, etc.) can significantly shorten how long your super lasts.

4. Not Considering Tax

Super withdrawals after age 60 are tax-free in pension phase. However, other income (rental, part-time work) is still taxable. Plan accordingly.

5. Forgetting About the Transfer Balance Cap

If you have a large SMSF, the Transfer Balance Cap ($2.0M in 2025-26) limits how much you can transfer to pension phase. Excess amounts remain in accumulation phase and are taxed at 15%.

How to Think About Your Personal Retirement Needs

Rather than relying only on generic figures or rules of thumb, many people find it useful to think about their own retirement needs in terms of:

1. Your desired annual income - Looking at current spending and how it might change in retirement (for example, fewer work costs but more leisure)
2. Your current super balance - Using your latest statement as a starting point
3. Years until retirement - How long you expect to keep contributing
4. Expected investment returns - Both before and during retirement, noting that these are always uncertain
5. Age Pension eligibility - Considering how the asset and income tests might apply to you
6. Other assets and income - Such as rental properties, part-time work, annuities or other investments

Next Steps

Now that you understand how much super you might need, here are your next actions:

1. Calculate your retirement goal - Use our calculator to model your specific situation
2. Check your current super balance - Log into your super fund to see where you stand
3. Increase contributions if needed - Salary sacrifice or after-tax contributions can boost your balance
4. Review your investment strategy - Ensure your super is invested appropriately for your time horizon
5. Consider professional advice - A licensed financial adviser can provide personalized strategies

📚 Cornerstone Guide

📖 How Much Super Do I Need to Retire? — Full guide (ASFA standards, Age Pension, scenarios, calculator)

Related Articles

• Age Pension Asset Test 2025: Complete Guide to Thresholds & Rates � Understand how the asset test affects your pension entitlement

More articles on contribution limits, drawdown strategies, and transition to retirement coming soon.