Do you really need $1 million to retire?
Written and accurate as at: Oct 12, 2025 Current Stats & Facts
Ask a group of strangers how much money the average Australian will need in retirement and there’s a good chance their answers will coalesce around a single figure – $1 million.
But there’s no real reason $1 million is held up as the ideal benchmark. In fact, most Australians will reach retirement – and thrive, at that – with a much smaller sum.
So what’s a better way to think about how much money you should have once you retire?
Be realistic about your retirement goals
To start, make sure you’ve got a clear idea of the kind of lifestyle you want in retirement.
Take someone who’s perfectly content leading a quiet life, spending time with family, puttering about in the garden, and taking the occasional domestic trip when the fancy strikes them. They’re going to need a lot less money than someone whose bucket list includes regularly dining out and visiting a new country every year.
So what will those respective budgets look like? The Association of Superannuation Funds of Australia (ASFA) regularly crunches the numbers to find out how much the average retiree will need if they want to live a comfortable lifestyle or a modest one.
In its June 2025 release, it says a couple will need a combined balance of around $690,000 at age 67 to enjoy a comfortable retirement. That translates to an annual income of $75,319. Meanwhile, couples who intend to live modestly will need just $100,000, or around $49,992 per year.
Both scenarios make a few assumptions (such as that you’ll own your home outright and will be receiving the Age Pension), so don’t take those figures as gospel. Instead, treat them as a helpful starting point when drawing up your plan.
Think about how long your retirement will last
Remember that life expectancy statistics are just averages, meaning you may very well live beyond them. Ideally, your retirement budget will stretch far enough to cover 25 to 30 years of living expenses, and then some.
Keep in mind that retirement costs are often highest in the early years, when your health allows for travel and other expensive activities, before tapering down as you embrace a quieter lifestyle. Things might then jump up again as your healthcare needs increase.
Will you have any other sources of income?
Important as it is, your super is just one part of the retirement puzzle. To really get a sense of what’s in store for you in your post-work years, it might help to focus less on overall balances and more on income streams.
Once you turn 67, you might be able to supplement the money you get from super with the Age Pension. Your eligibility and the amount you receive will depend on your income and assets, but for many people the support provided is invaluable.
There’s also the option to continue working. Not everyone retires as soon as they can access their super – some people are too attached to their job to give it up, while others feel they’d be in a stronger position if they spent a few more years saving.
If you decide to postpone retirement for a few years (or even return to work part-time after a brief hiatus), this can help firm up your finances and give you more scope to live the kind of retirement you want.
All this isn’t to say that super isn’t important, or that you shouldn’t be proactive and make extra contributions when you can. But it does mean it’s not the end of the world if that fabled seven-figure sum proves to be elusive.
If you’d like help planning your retirement, consider speaking to a financial adviser. They can work with you to clarify your goals, work out how far your money will get you, and – if necessary – find ways to help you build up your savings.
