A rising number of Australians are relying on their superannuation as their main source of income in retirement instead of the pension.
The Retirement and Retirement Intentions report, published by the Australian Bureau of Statistics (ABS) on Friday, shows 35% of retired men aged 45 years and over relied mainly on their superannuation to fund their retirement living expenses in FY25, up from 33% in FY23.
The data showed that 42% of retired men relied on the pension as their main source of income, down substantially from 47% in FY23.
Retired women aged over 45 years are also increasingly relying on their superannuation to fund their golden years. Superannuation was the main source of income for 23% of retired women in FY25, up from 21% in FY23.
The pension was the main source of income for 41% of retired women in FY25 — the same level as FY23.
The ABS said:
Retirees are increasingly relying on superannuation as their main source of income.
Between 2014-15 and 2024-25, the proportion of retired people with superannuation as their main source of income has increased from 20% to 28%.
Financial security is the key determining factor as to when people choose to retire, the ABS survey found.
However, retired women are much more financially reliant on their partners during retirement.
The ABS noted that 30% of retired women relied on their partner's income to fund their living expenses, compared to 9% of retired men.
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How many Aussies are in retirement?
There were 4.5 million Australians aged over 45 years living in retirement in FY25, representing 42% of the population in this age group.
The compares to 4.2 million, or 40% of the population aged over 45 years, in FY23.
Most people entering retirement today are baby boomers, who were born between 1945 and 1964.
The youngest baby boomers are 61 years old, which means this entire generation has reached the superannuation preservation age.
At preservation age, Australians who are retired permanently can gain full access to their superannuation savings.
Depending on when they were born, they are not eligible for the pension until ages 65 to 67.
For those born on or after 1 January 1957, the age of pension eligibility is 67 years.
Those who continue to work after preservation age can have partial access to their superannuation, if they like, via a transition-to-retirement (TTR) income stream.
This allows them to choose to work part-time, with their superannuation income stream supplementing a lower work income.
According to the Australian Prudential Regulation Authority (APRA), $132.5 billion in superannuation benefits was paid out in FY25.
That's a 12.8% increase on FY24.
APRA said:
This increase was the result of lump sum payments rising by 14.3 per cent to $73.3 billion and pension payments increasing by 11.0 per cent to $59.2 billion.
How much superannuation do you need for retirement?
Australia's Retirement Standard says couples need $690,000 and singles need $595,000 in superannuation by age 67 to fund a 'comfortable' retirement.
They also need a part-pension and unencumbered home ownership
The Association of Super Funds of Australia (ASFA), which compiles the Retirement Standard, defines a comfortable lifestyle as enough funds to cover the basics plus top level private health insurance, many exercise and leisure activities, occasional restaurant meals, a domestic holiday every year, and an international holiday every seven years.
ASFA estimates that a comfortable lifestyle costs $75,319 per year for couples and $53,289 for singles.
A 'modest' retirement requires just $100,000 in superannuation, plus a part pension and debt-free home ownership.
Living expenses for a modest retirement are $66,269 for couples and $49,044 for singles.
A 30-year-old earning $75,000 per year for life will have enough superannuation for a comfortable retirement following the increase in the Super Guarantee to 12% of wages.
