How much should I save for retirement?

Putting coins into a piggy bank

When we’re at the beginning of our working life, we really don’t give retirement too much thought. And superannuation? Well, that’s taken directly from our pay – out of sight, out of mind.  

But something happens around about the age of 55 and we begin to consider the next stage of our lives – something that looks like less working and more leisure. 

According to a recent Australian survey by comparison website Finder, about a quarter of us fear that we’re too poor to retire. 

So, how much should you save for retirement? Is there enough in the superannuation account? Will you run out of money in retirement? 

We’ll look at some considerations to take into account so you can answer that question with confidence. 

How much should I save for retirement?

How much you should save for in retirement is dependent on many factors that are personal to you. They’ll include things like whether or not you own your own home, have plans to travel or have health concerns to budget for. 

As a jumping off point, the Australian Superannuation Funds Association (ASFA) says we ought to have at least $690,000 in the bank to enjoy a comfortable retirement. The bad news is that most of us have about half that sum.

According to the association, this is what you should be aiming to have on hand each year to live either modestly or comfortably: 

If you’ve used superannuation fund online calculators and been dismayed by the result, you’re not alone. Some of these tools spit out very large numbers that fail to take eligibility for the aged pension into account. 

This is why it is worth the time to speak to a financial planner to ensure that the advice you receive is tailored to your specific circumstances. 

How much super is enough to retire? 

Depending on who you ask, anything from $100,000 to $3,000,000 in your superannuation account is enough to retire on – and those figures assume that you own your own home. 

While the superannuation industry suggests a figure north of $690,000, there is a further school of thought that suggests less than half that amount is adequate once you factor in the aged pension. 

Turning your superannuation lump sum into a regularly paid annuity on top of the aged pension can increase your retirement income. 

7 Considerations when managing money in retirement

If you’re concerned about managing money in retirement, you’re not alone. 

A survey commissioned by National Seniors Australia and Challenger in 2023 revealed that more than half of the respondents were worried about running out of money in retirement.   

The best time to start planning for retirement is while you’re still working and can rely on a regular income. Here are  a few points you might want to consider. 

1. How are you going to fund your retirement?

There’s no one-size-fits-all strategy for funding your retirement and your income can come from a number of different sources. 


Putting coins into a piggy bank


You may be fortunate enough to inherit property or a sum of money from the previous generation that you may be able to put towards your retirement.  

Australia doesn’t have an inheritance tax which means that you generally won’t be taxed on a legacy. If your inheritance takes the form of property, you will be charged capital gains tax if you do not sell it within two years of the death of the owner. 

Investments and assets

During your working life, you may have had the opportunity to make some additional investments aside from your superannuation. The dividends from these investments can be used to supplement the aged pension. 

There is a fine balancing act to negotiate between asset value and income if you are planning to claim a part pension. 

You might also consider divesting some of these assets to add to your superannuation which, depending on your circumstances, may also come with tax benefits

Part-time work

You might choose to continue working beyond the traditional retirement age. Quite a few people do for reasons beyond simply needing a pay cheque. Working part-time can help give you a sense of purpose and help you stay active and engaged. 

Did you know the Department of Social Services’ Work Bonus program means that a single pensioner can earn up to $504 a fortnight and still receive the full aged pension entitlement? 


Senior man working from home.

The aged pension

The maximum Australian aged pension with supplements is currently $1,096 a fortnight for singles and $1653 per fortnight for couples. 

Through the Work Bonus program and dividends from your superannuation, you can top up your pension until you’ve reached a threshold amount where your pension is reduced by 50 cents for every dollar over the nominated amount.

The latest figures show that two-thirds of Australians over the age of 66 receive the aged pension with 25 percent of those receiving a part pension.

Navigating your way through the maze of rules and exemptions can make it tricky to determine whether you are eligible for the pension or some of the allowances available, but it is worth sitting down with a financial advisor for professional advice. 


For most of us, superannuation is going to be the primary source of our retirement income and there is a lot you can do in your pre-retirement years to maximise the money when you finally pull the pin on the day job. 

They include:  

And that’s not all. Once you’ve reached preservation age, or decided the time is right to retire, the next step will be determining how you’d like to access your super. 

Your options include: 

  • Withdraw all or some as a lump sum 
  • Keep it with the fund until you’re ready to draw on it 
  • Purchase an annuity 
  • Purchase an account-based pension 

Learn if $1 million is enough to retire at 55 here.

2. What kind of lifestyle do you want?

Once you know where your retirement funding is coming from, the next step is to look at the lifestyle you’d like to lead. 

Whether you’re planning a life of travel and adventure or intending to kick back and relax for a while, it is worth giving the matter due consideration. 

One thing is for certain, you don’t want to be spending precious time doing housework or laborious yard work. So does the large family home still suit your needs – especially if you’re an empty nester? 

And what if you’re planning an extended holiday? Will you have the additional expense of a housesitter or worry about the security of your unattended home? 

Now that you’re considering an active and exciting retirement lifestyle, take the time to consider whether now is the right time to downsize as well. 

No longer constrained by being close to the kids’ schools or work? A tree change or seachange move might also be on the agenda. Looking at over-50s lifestyle resorts that offer great facilities without entry and exit fees are a great way to downsize without compromising on lifestyle. 

Two friends embracing happy to see each other at the airport.

3. Consider estate planning

Estate planning should be part and parcel of retirement planning. Both are related because there are tax implications. 

Are you planning to leave a legacy or planning to ‘SKI’ – spend the kids’ inheritance? If you’re planning to leave assets, consider the impact retaining them will have on your finances and pension eligibility. 

What assets are you hanging on to to help fund your retirement? Should they be sold before retirement to add to your super? Or should you hang onto them until the age of 74 when it is your last chance to make a contribution? 

These are not simple questions to answer and will require professional legal and financial planning advice. 

Also, speak to your superannuation fund and ensure you have a binding death benefit to guarantee that your superannuation goes to the person you want it to go to instead of who they think it should go to.

4. Paying off your debts

Paying off your debts before finishing up work is one of the golden rules for successful retirement.  

Sadly, for the crop of Australians hitting their 50s, almost 90 percent believe they will still be paying off a mortgage by the time they retire. 

It might be tempting to wait to the preservation age and use your super to pay off big bills like the mortgage but this should be balanced against having reduced savings for your retirement. 

If you’re looking at retiring in the next five to ten years, your financial focus ought to be on reducing as much debt as you can while you are working. That might mean extending your working life with that goal in mind. 

Work with a professional financial planner who will be able to suggest ways to make a big dent into your debts and make a game plan for increasing your retirement funds. 

5. Establishing a realistic budget

If you already use a household budget, you’re ahead of the game. It means you know what money is coming in and you can budget for expenses accordingly – and it’s no different when you reach retirement. 

The good news is there are several free online resources to help ensure your budget is adequate for your needs now and into the future. 

The Federal Government’s Moneysmart website has a retirement planner calculator that will take into account how variables including working part time, contributions, and retirement age impacts on the balance of your superannuation. 

The 4 percent rule

It’s one thing to know what your expenses are likely to be, but how much can you withdraw from your superannuation savings and not run out of money?  Many financial experts speak about the four percent rule which says you can withdraw that percentage each year and not run out. 

While this is a very handy rule-of-thumb, it doesn’t necessarily take into account the volatility of the current financial market. One maxim holds true though – make seeing a financial planner regularly for a financial health check a priority, just as you would visiting the doctor. 

6. Access discounts and entitlements

There is some privilege with age and that is access to discounts and entitlements – even if you’re not claiming the aged pension.  

Check with your state government on whether they have Seniors Cards.  

For example the Queensland Government has a range of discounts for residents over the age of 60 including concessions on electricity, vehicle registration, and certain medical services. 

You may also receive a 10 percent discount on goods and services from participating businesses by using the card. Even if you don’t have a card, don’t be afraid to ask if there is a discount for seniors – after all you won’t get if you don’t ask! 

Also, the Federal Government has compiled a list of concessions you might be entitled to including extra payments under particular circumstances. 

7. Are you going to downsize?

One great way to help clear up any remaining debts and to boost your superannuation fund is to consider downsizing your home while you’re still working. 

Over-50s lifestyle resorts are a great option for people who want to maximise lifestyle and reduce day-to-day expenses while continuing to work. 

They are quite unlike retirement villages which have age restrictions, may oblige you to be retired, as well as charge entry and exit fees, deferred management fees and capital gains fees.

With land lease over-50s lifestyle resorts, such as GemLife, you actually own your own home and simply lease the land that it is on, paying a weekly site fee which is similar to a body corporate fee. 

There are also government incentives for those over 55 through the Downsizer Super Contribution Scheme which allows you to add up to $600,000 per couple ($300,000 for singles) from the proceeds of your family home into superannuation. 

This means you can turbo charge your super, enjoy a new home in a lifestyle resort with lower running costs, while you continue to work until your superannuation preservation age and beyond if you wish. 

Learn more about downsizing for pensioners here.

You don’t have to wait to enjoy a resort lifestyle

Looking forward to retiring is one of the most exciting life stages – after working hard for many years this is your time to put you first.  

If your plans include right-sizing to an over-50s lifestyle resort with homes offering luxury inclusions in a resort that makes you feel like you’re on holidays every day in the year, then give GemLife a call.

With no entry and exit fees to worry about, you can enjoy life the way you want to live it. GemLife over-50s lifestyle resorts are located in some of the best tree change and seachange locations in Australia with outstanding resort and sporting facilities that today’s active over 50s value.