In Australia, most superannuation calculation models use age 67 as the primary baseline.
Age 67 is also the qualifying age for the Age Pension.
At this point, it's assumed most retirees will be drawing down, or about to draw down, on their super to finance their retirement lifestyle.
But how much do you need to have saved to be able to retire comfortably?
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What does a comfortable retirement look like?
A comfortable retirement is considered one that gives individuals and couples a good standard of living and enough money to finance things like top-tier health insurance, regular social and leisure activities and some travel.
What does a comfortable retirement cost?
There are a couple of benchmarks to consider.
The Association of Superannuation Funds of Australia (ASFA) calculates that comfortable retirement will cost roughly $55,923 per year for single Australians. It's expected to cost a couple living together closer to $78,566 per year combined.
Meanwhile, independent consumer advocacy group Super Consumers Australia (SCA) splits costs into three categories: low, medium and high spending. And they're based on the actual spending data of Australian retirees rather than an estimated budget.
For the sake of comparison, we'll assume a high budget gives the most 'comfortable' standard of living.
SCA calculates that retirement will cost roughly $61,100 per year for single Australians, and $88,920 per year for couples.
How much do I need in my superannuation to finance this type of retirement at age 67?
In order to have enough money for a comfortable retirement, ASFA calculates that at age 67, single Australians should have around $630,000 in their superannuation. Meanwhile, couples will need a balance closer to $730,000.
The calculation assumes you will only need to fund around 10 years of retirement, will be eligible to receive a part Age Pension, and that you own your home in full.
SCA calculates that you need a little more. Single Australians need a superannuation balance of $891,000, while couples need around $1.216 million.
These calculations assume that about 29-34% of your retirement spending will be covered by the Age Pension and that you own your home outright.
How does your superannuation balance compare?
I don't have enough. Is it too late to boost my superannuation balance?
Even at age 67, there are a few things you can do now which will help to increase your superannuation balance.
The first piece of advice is always to check that your super fund is performing well and that your investment strategy and risk profile match your own.
Then, you want to add extra contributions wherever you can. Individuals can make concessional (before-tax) super contributions or after-tax payments within their annual limits.
Government contributions might also be available depending on your personal circumstances.
If you've done all these things and you still don't have enough to finance a comfortable retirement, another option is to continue working for a few more years. By delaying retirement into your early 70s you get an extra three or so years of income and compound growth.
