Where to find retirement income in addition to super

The national conversation about retirement and retirement income tends to revolve around super. How much you’ve got and will it be enough.

Yet people retiring today have only had super contributions of 9% or higher for part of their working lives, leaving many with a gap between means and expectations. Or does it?

Today’s retirees are healthier and wealthier on average than previous generations, with overseas travel, touring Australia and an active social life all high on the wish list. As retiree lifestyles are changing, so too is the way retirement is funded.

Australia’s retirement income system is built around three pillars – superannuation, the Age Pension, and voluntary savings inside and outside super. But that ignores other potential sources of income.  

So, if you’re wondering how to fund your dream retirement, let’s count the ways.

1. Superannuation

For most Australians, super is fast becoming the biggest financial asset outside the family home and a major source of retirement income. At the very least, it will augment any Age Pension you might receive and help pay for a more comfortable lifestyle.

According to the latest figures from the Australian Bureau of Statistics (ABS), in June 2022 median balances were around $206,000 for men aged 65–69 and $191,000 for women the same age.

Median balances (where 50% of people have more and 50% have less) tend to be more realistic than averages which can be distorted by individuals with very large balances. The average balance for men aged 65–69 was $428,533 in 2022, and $379,483 for women.

A nest egg this size is far bigger than previous generations enjoyed, but it won’t be enough on its own to fund 20 years or more of retirement. Most retirees still depend to some extent on the Age Pension.

The good news is that a decade from now, the median balance for retirees who have had 9% super contributions their entire working lives should exceed $500,000. That will help close the retirement income gap but won’t close it entirely.

Explore our articles on how much super you need to retire and how to work out your retirement income needs.

2. The Age Pension