New data shows you don’t need a million dollars to retire comfortably

New research has found the amount needed in superannuation for a comfortable retirement is much less than expected.

Advocacy group, Super Consumer Australia (SCA), have categorised their findings for low level, average level and high level spenders in both single and couple scenarios.

For singles, the below table advises the average spending per fortnight to achieve the yearly savings to retire comfortably:

For couples, the below table advises the funds needed to retire comfortably:

SCA director Xavier O’Halloran said most Australians believe a savings of $1 million was needed to retire comfortably in an interview with  ABC Radio Perth.

“When we reviewed a lot of the commentary on how much you need to save for retirement, we see this figure coming up a lot. It’s often from groups or individuals that might have a self-interest in you having more and more savings,” O’Halloran said.

“They are all, of course, clipping your ticket in fees for managing that money, so you need to be really careful about what the interests are at play when you’re getting advice that you need a million dollars to retire.

“As our research found, that was appropriate really only for very high expenditure households.”

SCA’s research shows that for a couple to retire comfortably by the age of 67, a total savings of $360,000 is needed, which can be achieved by earning the median income of $55,000 per year.

For singles, holding an average income of $37,000 to achieve a savings of $259,000 for retirement.

Today’s finance expert Effie Zahos said the new figures vary greatly from what the Association of Superannuation Funds of Australia (ASFA) say.

“This is more inspirational, it looks at budgets, includes inflation and what you need to have a dignified retirement so it is a comfortable retirement,” Zahos said.

“They say for a comfortable retirement for a single person you need $545,000 in super.

“If you put a benchmark so high, people will be scared off and won’t chase it. These numbers are closer to what you need.

“Thirty-nine per cent of people in retirement rely on the age pension and they are getting an increase, $10 for a single and $20 odd for a couple and they have stretched the asset test which means more people are eligible for the pension.”

Past research by Commbank found that the majority of Australians aren’t on track to reach these retirement goals, however, financial planners have revealed there are steps people nearing retirement can take to get back on track.