How much do I need in my superannuation to retire comfortably at age 60?

In Australia, the average age of retirement is 65 years old. But did you know you can access your superannuation a lot earlier, at age 60?

That's because, at age 60, you're officially at preservation age. Which means if you've ceased working, you're eligible to start your retirement and begin drawing down on your superannuation balance.

Of course, the only catch is that you'll need enough in your super to fund a comfortable retirement lifestyle. 

But what could a comfortable retirement starting at age 60 actually look like? 

Let's investigate.

What does a 'comfortable retirement' mean?

The Association of Superannuation Funds of Australia (ASFA) divides retirement into two broad lifestyle categories: comfortable and modest.

A comfortable retirement is defined as one that enables retirees to maintain a good standard of living well beyond the Age Pension and a modest retirement. It budgets for expenses such as top-tier private health insurance and regular leisure activities. It allocates funds for home repairs or renovations, the occasional meal out, and perhaps even an annual holiday.

Meanwhile, a modest retirement is defined as being able to cover expenses just slightly above what the full Centrelink Age Pension would provide from age 67.

How much does a comfortable retirement cost?

ASFA estimates that a comfortable retirement will cost around $55,923 per year for single Australians. A couple living together can expect to spend around $78,566 per year combined.

In order to fund this lifestyle level, ASFA has calculated that at age 67, single Australians will need around $630,000. Couples will need a combined superannuation balance closer to $730,000.

But the catch is that these figures are based on the understanding that you'll retire at age 67, that you will only need to fund around 10 years of retirement, will be eligible to receive a part Age Pension, and you own your home in full.

So, if you want to retire at a much earlier age of 60, you'll need to work towards a different goal to be able to fund those extra seven years.

I want to retire at age 60. How much superannuation do I need?

Your annual costs will be around the same: $55,923 per year for single Australians and $78,566 per year combined for a couple living together.

But, as I mentioned above, you'll need to fund an additional seven years that ASFA figures haven't accounted for.

I've done a quick calculation to work out the amount you actually need in your superannuation to retire at age 60 and maintain the same comfortable quality of life.

At age 60, singles will need to have closer to $1 million in their superannuation. Meanwhile, couples will need a combined balance of around $1.3 million at the same age. 

But note, if you don't own your home outright, you'll also need to consider how you'll pay your mortgage or rent.

Is your superannuation on track to retire early?