How much super do you need?

Define your retirement lifestyle

When you think about what your life is like when work is done, what do you see? How you envisage your lifestyle will determine how much super you’ll need to make those goals a reality.

The Association of Superannuation Funds of Australia (ASFA) study tracks how much you need to maintain either a ‘modest’ or ‘comfortable’ retirement. We’ve summarised these differences compared with relying solely on the age pension in the table below:

Comfortable Retirement	Modest Retirement	Age Pension Only
One annual holiday in Australia	One or two short breaks in Australia near where you live each year	Even shorter breaks or day trips in your own city
Regularly eat out at restaurants. Good range and quality of food	Infrequently eat out at restaurants that have cheap food. Cheaper and less food than a ‘comfortable’ lifestyle standard	Only club special meals or inexpensive takeaway
Owning a reasonable car	Owning an older, less reliable car	No car or, if you have a car, it will be a struggle to afford repairs
Afford bottled wine	Afford cask wine	Home brew beer or no alcohol at all
Good clothes	Reasonable clothes	Basic clothes
Take part in a range of regular leisure activities	Take part in one paid leisure activity infrequently. Some trips to the cinema	Only taking part in no cost or very low cost leisure activities. Rare trips to the cinema
A range of electronic equipment	Not much scope to run air conditioner	Less heating in winter
Replace kitchen and bathroom over 20 years	No budget for home improvements. Can do repairs, but can’t replace kitchen or bathroom	No budget for home problems like a leaky roof
Private health insurance	Private health insurance	No private health insurance

How much will it cost?

For most people, a ‘comfortable’ retirement lifestyle is preferable to a ‘modest’ one. A comfortable lifestyle enables you to engage in a wider variety of leisure activities and a better standard of living. But is this a reality?

Assuming you own your home outright and are reasonably healthy, the ASFA study estimates the following yearly costs (how much you’ll need to budget for each year) for these lifestyles in retirement:

ASFA Retirement Standard – Budgets for various households and living standards for those aged around 65 (June quarter 2018 national)

Modest lifestyle		Comfortable lifestyle
Single	Couple	Single	Couple
$28,254 p.a.	$40,829 p.a.	$44,412 p.a.	$62,828 p.a.

ASFA Retirement Standard – Budgets for various households and living standards for those aged around 65 (March quarter 2021 national)

Are you on track?

We have a number of tools available so you can see how your super is tracking. For most members, the annual Benefit Statement includes a projection of your Mercy Super account balance at 67 and the annual income it’s likely to provide.

To help you understand if you’re on track, this table provides an estimate of the super needed for a single person or couple retiring at 67, providing the income needed for a ‘comfortable’ lifestyle over 25 and 30 years.

	Single ($44,412 p.a.)	Couple ($62,828 p.a.)
25 years (to age 92)	$410,000	$480,000
30 years (to age 97)	$550,000	$610,000

Calculated in today’s dollars using the Mercy Super Retirement Modeller. Assumptions used: homeowner with no other retirement income or assets, retirement age 67, allowance made for age pension, Balanced investment strategy with 6.4% post retirement return, administration fee 0.25% p.a. capped at $600, price inflation 2.0% p.a.

You can explore whether you’re on track for a comfortable retirement lifestyle by using the Super Guru Super Balance Detective calculator. This provides an estimate of the balance you should have now, based on your year of birth, to provide a comfortable lifestyle in retirement for a relatively healthy single person who owns their home outright.

Give your super a boost

If your retirement isn’t looking too comfortable, don’t worry – there are still ways to boost your super. Even if you only have a few years until retirement you can make a significant difference to your super and, in turn, your retirement lifestyle. You might like to consider:

Topping up your retirement savings with extra contributions – you’ll be surprised the difference putting away a little extra can make.
Combining your super accounts into a single account. You’ll pay just one set of fees and be able to keep track of your super more easily.
Including your spouse in your planning.
Reviewing your investment strategy to make sure you’re in the right option for your needs.

Check out what your retirement might look like

You can also see what your retirement may look like by using our online Retirement planner. You can include your partner’s details and test what your likely retirement income could look like under different scenarios, including different: