How much superannuation is enough to retire comfortably in 2024?

We reveal exactly how much a comfortable retirement costs per year.

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Are you aspiring to a comfortable retirement funded by your superannuation?

Here we reveal exactly how much that's going to cost you and how much super you'll need to fund it.

How much superannuation do you need?

A financially 'comfortable' retirement is defined by the Association of Super Funds of Australia (ASFA) as the ability to cover life's essentials plus private health insurance, a range of exercise and leisure activities, occasional restaurant meals, a domestic trip once per year and an overseas holiday every seven years.

According to the AFSA Retirement Standard, couples need about $690,000 in superannuation by retirement age, plus a part-pension, to fund a comfortable lifestyle.

AFSA estimates that a comfortable lifestyle in 2024 costs retired couples about $72,148.19 per year.

What about single retirees?

Single retirees aged 65 to 84 years need $595,000 in superannuation and a $51,278.30 budget to achieve a comfortable retirement lifestyle.

By the way, the retirement age is generally defined as whenever you become eligible to receive the age pension, either in part or in full. If you were born after 1 January 1957, the retirement age is 67 years old.

What if you can't afford a 'comfortable' retirement?

In this case, ASFA also offers some financial guidelines to achieve a 'modest' retirement.

Simply put, both singles and couples aged 65 to 84 years need $100,000 in superannuation and a part-age pension to cover annual living expenses of $46,944 for couples and $32,666 for singles in 2024.

This is enough to cover daily essential items like supermarket groceries, transport, home repairs, basic health cover, occasional exercise, and leisure and social activities.

It appears that a modest lifestyle is affordable for most Australians. We say that because the average superannuation balance for people aged 65 to 69 years today is $428,738. The median is $207,540.

That's according to the latest Australian Taxation Office (ATO) data.

If we break the numbers down by gender, the average balance for men is $453,075 and the median is $213,986. The average for women is $403,038 and the median is $201,233.

So, if you're aged 67 and ready to retire, and you own your own home, you can afford a modest lifestyle with the superannuation you've got (if you have the average balance or more) plus a part pension.

AFSA's estimates assume you will draw down all your super capital, invest it, and receive a 6% return per annum. The only other proviso is that you own your home without a mortgage.

What about the pension on top of your superannuation?

AFSA's estimates are based on retirees receiving only a part pension on top of their super.

At the time of writing, the full age pension is $42,988.40 per annum for couples and $28,514.20 for singles. This includes the full pension supplement and energy supplement.

How to generate income from shares

In retirement, investors often seek high passive income via ASX shares paying strong dividends.

Here at The Fool, we regularly report on high-yielding ASX dividend shares that brokers are recommending we buy today.

Here are some examples.

At the moment, Citi is recommending Stockland Corporation Ltd (ASX: SGP) with a 12-month share price target of $5. The broker forecasts dividend yields of 6.1% in FY24 and 6.2% in FY25, respectively.

Goldman Sachs is recommending Telstra Group Ltd (ASX: TLS) with a share price target of $4.55. The forecast dividend yields are 4.9% in FY24 and 5.2% in FY25, respectively.

Macquarie is recommending APA Group (ASX: APA) with an outperform rating and a $9.40 price target. It forecasts dividend yields of 6.6% in FY24 and 6.8% in FY25.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has positions in Macquarie Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Macquarie Group. The Motley Fool Australia has positions in and has recommended Apa Group, Macquarie Group, and Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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