By age 62, you've passed the preservation age, so you're able to access your superannuation and begin your retirement, so long as you quit working.
By this point you're also only five years away from receiving the Age Pension payment (if you're eligible).
But how do you know if you have enough to retire comfortably by this age?
Let's break down what it looks like to retire comfortably at age 62, and how much it'll cost you.
Then you can work out if you have enough super to make it happen.
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What is a comfortable retirement?
According to the Association of Superannuation Funds of Australia (ASFA), a comfortable retirement is defined as one that enables retirees to maintain a good standard of living well beyond the Age Pension.
It budgets for expenses including top-tier private health insurance, a new car, regular leisure activities and the occasional meal. It allocates funds for home repairs or renovations, and perhaps even an annual holiday.
How much will a comfortable retirement cost me?
To retire comfortably at age 67, ASFA estimates that you'll need to allocate around $55,923 per year if you're a single Australian living alone. A couple living together will need $78,566 per year.
These figures also assume you'll receive a part Age Pension. They also assume you own your home in full.
To fund this type of comfortable retirement, ASFA calculates that single Australians will need around $630,000 in their superannuation. Meanwhile, couples will need around $730,000.
Obviously, the catch is, if you're planning to retire five years earlier at age 62, you'll need to allocate extra savings to fund those three extra years.
How much do I need in my superannuation at age 62 to retire comfortably?
I've done the maths for you, using ASFA's figures, to work out what you should aim to have in your superannuation by age 62.
Singles should aim to have closer to $910,000 in their superannuation and couples closer to $1.12 million at age 62.
Remember also, these figures assume you won't need to pay mortgage or rent bills in retirement. So if you don't own your home outright, you'll also need to factor in these costs too.
I don't have enough. What's the alternative?
Just because a comfortable retirement is what everyone aims for, it doesn't mean it's essential. You can still retire around the same age if you're willing to take some sacrifices in your retirement years.
In Australia, retirement is generally split into two categories: a modest retirement and a comfortable one.
ASFA defines a modest retirement as being able to cover expenses just slightly above the full Centrelink Age Pension provisions from age 67. This would be basic health cover, infrequent leisure activities, a limited budget for some repairs and perhaps a short domestic trip.
A modest retirement will cost around $36,434 for single Australians and closer to $52,473 for couples combined.
To achieve this from age 62 I've calculated that a single person would need around $292,000 in their superannuation, and a couple would need $382,000 combined.
And again, this assumes you'll also receive the Age Pension and that you own your home outright.
Of course, the other option is to delay your retirement until later in your 60s. Remember, every year of contributions and compounding helps grow your superannuation balance closer to where it needs to be.
