By Paul Feeney, Founder and Chief Executive Officer, Otivo
Ask how much you need to retire and you'll get a number, usually a big, round, slightly terrifying one. But the honest answer is that it depends entirely on the life you picture, and for many Australians the figure is smaller than the headlines suggest, because the Age Pension quietly does part of the lifting. Here's how to think about your own number rather than someone else's.
There's no single figure, but benchmarks help. As at July 2026, ASFA estimates a single homeowner needs about $630,000 at age 67 for a comfortable retirement, and a couple about $730,000, assuming a part Age Pension tops up their super. What you need depends on your spending, how long your retirement lasts, and the income sources you draw on.
How much does a comfortable retirement actually cost?
The most widely used guide is the ASFA Retirement Standard. As at its March 2026 update, ASFA estimates a comfortable retirement costs a single person around $54,840 a year and a couple around $77,375, covering private health cover, a reliable car, home maintenance, and the occasional holiday. To fund that, ASFA points to lump sums of about $630,000 for a single and $730,000 for a couple at age 67. A modest retirement, which covers the basics with less room for extras, needs considerably less, since the Age Pension does more of the work at that level.
Why does the number depend on the life you want?
Because spending is the real driver, not some universal target. Two people the same age can need very different amounts depending on whether they picture regular travel or a quiet life close to home. The ASFA figures assume you own your home outright, which matters, since rent or a remaining mortgage changes the picture significantly. Starting from the life you actually want, then working back to the income it needs, gives a far more useful number than a headline figure that assumes someone else's lifestyle.
How does the Age Pension change the number?
This is the part that eases a lot of anxiety. For many retirees the Age Pension is a foundation their super sits on top of, rather than something their super has to replace entirely. It's income-and-assets tested, so how much someone receives depends on their circumstances, but the effect is that the lump sum you personally need is often smaller than the full cost of your retirement, because part of it comes from the pension. Because the thresholds change regularly, Services Australia is the place to check current rates and eligibility.
How long does your money need to last?
Longer than most people plan for. Someone retiring at 67 today could reasonably live into their late eighties or beyond, so the number has to fund two decades or more, not a handful of years. That's why a lump sum that looks large has to stretch, and why the income it produces each year matters more than the headline balance. Read three inputs together and your own number takes shape, your spending, your timeline, and the income sources you'll draw on.
Frequently asked questions
Is $1 million enough to retire in Australia?
For many people, yes, since it sits above ASFA's comfortable benchmark for both singles and couples. But enough always depends on your spending, whether you own your home, and how long your retirement lasts, so the same balance can feel generous for one person and tight for another.
Does the Age Pension count towards retirement income?
Yes. For eligible retirees the Age Pension is a core income source alongside super, which is why the personal savings target is often lower than the full cost of retirement. Eligibility and rates are set by Services Australia.
How much do I need if I rent in retirement?
Generally more than the standard benchmarks suggest, because ASFA's figures assume you own your home outright. Ongoing rent is a significant added cost, so renters typically need a larger income and a larger pool of savings behind it.
Where to from here
The benchmarks are a useful starting point, but your number is your own. Otivo, a licensed Australian financial advice platform holding AFSL and Australian Credit Licence No. 485665, offers a retirement planning module that estimates how much you'll need and what could improve your position, factoring in your age, income, super balance, other investments and Age Pension eligibility. It turns a national average into a figure built around your life.
Sources
- Association of Superannuation Funds of Australia — ASFA Retirement Standard, March 2026 update — superannuation.asn.au
- Services Australia — Age Pension eligibility and rates — servicesaustralia.gov.au
- ASIC MoneySmart — how much you need to retire — moneysmart.gov.au
Disclaimer
The information in this communication is current as at July 2026 and has been prepared by Otivo Pty Ltd ABN 47 602 457 732, AFSL and Australian Credit Licence No. 485665. This content is general information only and has been prepared without taking into account your objectives, financial situation or needs. It is not personal financial or taxation advice and should not be relied on as such. Before acting on any information, you should consider its appropriateness having regard to your personal circumstances. This material must not be reproduced in whole or in part, or posted on any social media platform, without the prior written consent of Otivo Pty Ltd.