Retirement planning can look a little less intimidating when two people are approaching it together.
Couples often have two super balances, two working histories, and the ability to share many of the largest household costs.
Even so, deciding whether there is enough money to retire comfortably is rarely as simple as adding the two balances together and hoping the result looks reassuring.
The better question is whether the combined super, other savings, and any future Age Pension payments can support the lifestyle both people expect after work.
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What is the benchmark for couples?
According to the Association of Superannuation Funds of Australia, a homeowner couple needs around $730,000 in super at retirement to support a comfortable lifestyle.
That estimate assumes the couple owns their home outright and receives some Age Pension support as their savings decline over time.
A comfortable retirement is not intended to represent an extravagant lifestyle. It allows for private health insurance, a reliable car, regular leisure activities, household repairs, domestic holidays, and occasional overseas travel, while also leaving some room to deal with unexpected costs.
For couples expecting a simpler lifestyle, ASFA estimates that around $120,000 in combined super may support a modest retirement for homeowners. At that level, however, the Age Pension would be expected to provide most of the couple's income, and there would be much less room for travel, larger purchases, or financial surprises.
Why couples do not need twice as much as singles
The comfortable retirement target for a couple is only moderately higher than the $630,000 benchmark for a single homeowner.
This may initially appear surprising, but couples can share many major expenses. They usually pay for one home, one electricity connection, one internet service, and many of the same household items that a single retiree must fund alone.
That creates an important advantage, although couples should not assume that every cost will be shared evenly. Healthcare, hobbies, travel preferences, and personal spending can still vary considerably between two people.
The shared-cost benefit also means that relationship status can have a major influence on how far a super balance stretches. A couple with $730,000 may be able to achieve a comfortable lifestyle, while a single retiree with half that amount could face a much tighter budget.
Is $730,000 enough for every couple?
The ASFA figure is a guide rather than a guarantee, and some couples will require substantially more.
Those who plan to retire early may need to fund several years before becoming eligible for the Age Pension. Couples who are still paying a mortgage, renting privately, travelling frequently, or supporting adult children may also need a larger balance.
Health can change the calculation as well. Private health insurance, dental treatment, home modifications, mobility assistance, and care costs can place additional pressure on retirement income.
Other couples may find that they need less than the benchmark because they own a low-maintenance home, have modest spending habits, or receive income from investments outside super.
Combined balances can make a major difference
One benefit of planning as a couple is that two moderate balances can create a strong combined position.
For example, two people retiring with $365,000 each would together meet the current comfortable benchmark. Neither balance looks especially large in isolation, but the household position is much stronger once they are combined.
This is why couples should review their retirement finances together rather than treating each superannuation account as a separate plan. Contribution strategies, investment risk, retirement dates, pension eligibility, and expected spending all affect the household outcome.
It may also make sense for one partner to contribute more heavily to super at certain times, particularly when there is a large difference between balances or taxable incomes. The appropriate strategy will depend on the couple's circumstances and may be worth discussing with a qualified adviser.
The real retirement target
A couple's retirement target should ultimately be based on expected spending rather than a single headline number.
Housing is likely to be the largest dividing line. A couple with a paid-off home and $600,000 in superannuation may feel more secure than renters with a substantially larger balance because ongoing housing costs can absorb a significant share of retirement income.
The timing of retirement matters as well. Working for an additional year or two can allow further contributions, provide more time for investment growth, and shorten the period that super needs to fund.
Foolish takeaway
A homeowner couple aiming for a comfortable retirement should currently target around $730,000 in combined superannuation, while a modest retirement may be possible with around $120,000 and substantial Age Pension support.
Those figures provide a reasonable starting point, but the right amount will depend on housing, retirement age, spending expectations, health, and other assets.
The strongest position is not necessarily having the largest possible balance. It is having enough combined income and flexibility to support the retirement that both partners have in mind.
