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:
| Desired income per year | Super balance you’ll need at age 65 |
| $36,000 | $200,000 |
| $51,000 | $500,000 |
| $59,000 | $750,000 |
| $68,000 | $1,000,000 |
| $110,000 | $2,000,000 |
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.
How much money you'll need to retire at 65 will depend on whether your money is in tax-free super or whether it's in a bank account or investments etc, where your income from those sources, such as interest and dividends are likely to be taxed. It's handy to remember that retirement income might not just come from super. In fact, you may be eligible to combine super with the Government Age Pension.
Yes, once you turn 65 there are no restrictions on working while drawing a super income stream. You can also withdraw all your super and invest it elsewhere, but by doing so you may lose the benefit of the tax-free status that comes with having a super-based income.
Yes, you can retire at 65 with $300,000, but to enjoy a more comfortable retirement it's important to have other factors in place, such as owning your home outright and ensuring your budget will match your retirement plans and vice versa. Remember, as your super runs down later in life, your age pension amount increases.
Could you be better off sticking with your Industry SuperFund in retirement?
Nick is single, has no debt, rents where he lives and has just turned 70. When he 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:
That's a difference of nearly $16,000, simply because he stuck with his Industry SuperFund.
Nick's numbers
| Closing balance $326,504 | ||||
| Account balance invested after income taken | Income stream payments | Age Pension payments | Total income | |
| 2019/20 | $300,000 | $15,000 | $25,928 | $40,928 |
| 2020/21 | $282,683 | $14,134 | $27,845 | $41,979 |
| 2021/22 | $324,012 | $16,201 | $27,662 | $43,862 |
| 2022/23 | $299,579 | $14,979 | $29,132 | $44,111 |
| 2023/24 | $313,606 | $15,680 | $31,479 | $47,159 |
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:
That’s a difference of $2,717, simply because she stuck with her Industry SuperFund.
| Closing Balance | $54,031 | |||
| Account balance invested after income taken |
Income stream payments | Age Pension payments | Total income | |
|---|---|---|---|---|
| 2019/20 | $50,000 | $2,500 | $27,648 | $30,148 |
| 2020/21 | $47,043 | $2,352 | $28,181 | $30,534 |
| 2021/22 | $53,850 | $2,692 | $28,431 | $31,123 |
| 2022/23 | $49,718 | $2,486 | $29,468 | $31,954 |
| 2023/24 | $51,971 | $2,599 | $31,751 | $34,350 |
Note: Nick and Barbara are not actual members. Their stories have been created for illustrative purposes.
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 modelled by SuperRatings, commissioned by ISA and shows average differences in pension net benefit of the 'main pension Balanced option' of 7 Industry SuperFunds and retail funds tracked by SuperRatings, over a 5 year period. A 'main pension Balanced option' being the fund's largest pension Balanced option where 60% to 76% of the fund's assets are invested in growth investments. Where a fund does not have a Balanced option, the option closest to SuperRatings’ benchmark range of 60% to 76% growth investments is used. Outcomes vary between individual funds. Modelling performed on 16 October 2024 using data as at 30 June 2024. See www.industrysuper.com/assumptions for more details about modelling calculations and assumptions. Consider a fund's Product Disclosure Statement (PDS) and your personal financial situation, needs or 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.
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