How much super do I need to retire at 65?

There are 2 key factors that will play a major role in working out how much super you'll need to retire at 65: how long you want your super to last, and the amount of super you intend to withdraw each year as your income.

Let's assume that you want your super to last until you are 90, here are some indications of how much you will need:

This is an indication not an iron clad guarantee! The data was sourced from our super calculator, and you can find numbers that are more relevant to you by adding your own information into the calculator.

Example: Retiring on $300,000

At age 65, Nick retired with $300,000 in his super, which he intended to be his main source of income in retirement. He is single, has no debt, rents where he lives and has just turned 70.

When Nick stopped working, his superannuation adviser suggested that he open a super pension account with his Industry SuperFund, and start drawing down on his super gradually. By doing that, he would also be eligible for the Government Age Pension as a top-up.

This strategy also allowed the balance in Nick's super fund to remain invested and continue to grow until he withdraws it. Here's what that looked like:

• His $300,000 super balance was converted into an income stream account with his super fund.
• Over the past five years he withdrew around $15,466 per year from his account, which is tax-free
• He also received $26,986 p.a. from the Age Pension, giving him around $42,450 each year total.
• Thanks to an average five-year Industry SuperFund investment return of 6.91% (2018-2023), his super balance has actually grown to $326,498.
• If Nick had switched to a retail fund pension product at retirement, his balance would only be $306,445.

That's a difference of over $20,000, simply because he stuck with his Industry SuperFund.

Nick's numbers

Can I retire at 65 with $50k?

Yes, you can retire at 65 with $50,000 and the Government Age Pension will be the foundation of your income, with the money in your super providing you with a handy supplement. If you have other investments or income, the picture could be even better.

Example: Retiring on $50,000

Barbara is 70 years old, worked part-time throughout her life, and retired at 65. She lives by herself in a rented unit.

Due to being in and out of the workforce, her super balance at 65 was $50,000 and she knew she would need to rely on the Government Age Pension.

Before retiring, her Industry SuperFund adviser suggested that she gradually draw down on her super as a top up to her Age Pension. That would maximise the amount of Age Pension she would receive and allow her remaining balance to continue to grow in the early years, before she eventually brings her super balance to zero.

Here's what that looked like:

• Barbara transferred her $50,000 super into an income stream account with her Industry SuperFund.
• Over the past five years she withdrew around $2,569 tax-free each year to top up her Age Pension.
• Combining her Age Pension and her super, Barbara's annual income over the past five years has been about $30,735.
• Enjoying an average five-year Industry SuperFund investment return of 6.91% (2018-2023), her super balance has actually grown to $53,977.
• If Barbara had switched to a retail super fund at retirement, her balance would only be $50,792.

That’s a difference of $3,185, simply because she stuck with her Industry SuperFund.

Note: Nick and Barbara are not actual members. Their stories have been created for illustrative purposes.

Is $2 million enough to retire at 65 in Australia?

Retiring at 65 y.o. with $2 million in super will usually mean a pretty comfortable life in retirement. Of course, it won't last as long as it would if you retired at 70, but by using a retirement needs calculator, you can get an estimate of your ideal retirement income and super balance.

*Past performance is not a reliable indicator of future performance and should never be the sole factor considered when selecting a fund. Comparisons and modelling by SuperRatings, commissioned by ISA, and show average difference in pension net benefit results after the first 5 years of retirement of the main balanced investment options of 8 Industry SuperFund^# pension products and a sample set of retail pension products tracked by SuperRatings with a 5 year performance history to 30 June 2023 (23 funds), taking into account historical earnings and fees. The model assumes a drawdown amount of 5% per annum, which is deducted monthly. Outcomes vary between individual funds. Modelling performed on 6 October 2023 using data as at 30 June 2023. See the Assumptions page for more details about modelling calculations and assumptions. General advice only. Consider a fund's Product Disclosure Statement (PDS) and your personal financial situation, needs and objectives, which are not accounted for in this information, before making an investment decision. ISA Pty Ltd ABN 72 158 563 270 Corporate Authorised Representative No. 426006 of Industry Fund Services Ltd ABN 54 007 016 195 AFSL 232514.
# Note that since the date of the comparative modelling the number of funds qualifying as Industry SuperFunds has changed from 8 to 7. This change does not reduce any comparative differential shown in the modelling. Revised modelling will be undertaken in the near future.

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