New retirement saving targets released: How much should Australians have saved for retirement?
There is a mountain of information out there about how to prepare for retirement and what ways you can boost your superannuation savings. However, it all comes down to the age old question, how much money do you really need to have saved up for you to enjoy retirement?
Super Consumers Australia (SCA) have just released updated targets to help provide a super savings guideline for Australians who are planning to retire. The targets have been updated to account for the current cost of living crisis, which is costing Aussies 3% to 8% higher to maintain their living standards than last year. The recent increase of the Age Pension has also been taken into consideration.
Even though the cost of goods continues to creep up, there are some factors working to offset inflation for pre-retirees. The super guarantee has risen to 11%, giving workers an additional 0.5% of contributions from their employers. Alongside this, many super fund members enjoyed positive returns last year according to SCA.
The recommended savings targets were created using ABS data based on what Australians actually spend in retirement. The below figures include low, middle and high cost lifestyles and work on the assumption that you own your own home and won’t be spending money on rent or a mortgage. Let’s get into what the SCA recommends you have saved for retirement.
Savings targets for pre-retirees (Age 55-59)
If you live by yourself
| Amount you wish to spend in retirement (per fortnight) | Amount you wish to spend in retirement (per year) | You need(ed) to save this much by age 65 on top of your income from the Age Pension |
| $1385 (low) | $36,000 | $91,000 |
| $1808 (medium) | $47,000 | $317,000 |
| $2269 (high) | $59,000 | $777,000 |
If you live in a couple
| Amount you wish to spend in retirement (per fortnight) | Amount you wish to spend in retirement (per year) | You need(ed) to save this much by age 65 on top of income from the Age Pension |
| $2000 (low) | $52,000 | $116,000 |
| $2654 (average) | $69,000 | $425,000 |
| $3346 (high) | $87,000 | $1,037,000 |
Savings targets for current retirees (aged 65-69)
If you live by yourself
| Amount you wish to spend in retirement (per fortnight) | Amount you wish to spend in retirement (per year) | You need(ed) to save this much by age 65 on top of your income from the Age Pension |
| $1192 (low) | $31,000 | $76,000 |
| $1577 (medium) | $41,000 | $279,000 |
| $2115 (high) | $55,000 | $795,000 |
If you live in a couple
| Amount you wish to spend in retirement (per fortnight) | Amount you wish to spend in retirement (per year) | You need(ed) to save this much by age 65 on top of income from the Age Pension |
| $1692 (low) | $44,000 | $95,000 |
| $2308 (average) | $60,000 | $371,000 |
| $3077 (high) | $80,000 | $1,055,000 |
These savings targets factor in the income you could be getting from the Age Pension, which is a government payment you could be eligible for once you reach Age Pension age. SCA Director Xavier O’Halloran says that “Most people will access the Age Pension at some point in retirement. When combined with earnings from super, over the long-term the retirement system is designed to provide significant protection against cost of living increases”.
If you are close to retirement and want to figure out your preservation age or learn about how you can withdraw your super, we have informative super resources on our site.
Meanwhile, looking for somewhere to stash your savings? Check out some savings account options below.