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Home / Plan your retirement / How much super do I need? / How much super do I need to retire on $50,000 a year?

How much super do I need to retire on $50,000 a year?

February 14, 2020 by Barbara Drury Leave a Comment

Reading time: 2 minutes

On this page

  • Crunching the numbers
  • Transfer balance cap
  • Where to go for more

It’s fair to assume that the average Australian might hope to live comfortably, if not lavishly, in retirement.

The widely reported ASFA Retirement standard suggests a single person can enjoy a ‘comfortable lifestyle’ on around $44,000 a year, so it stands to reason they should be able to live more than comfortably on $50,000. For couples, $50,000 a year affords a lifestyle that allows for more spending than ASFA’s ‘modest’ budget of around $40,000 a year but not quite up to the ‘comfortable’ standard of around $62,000. 

If $50,000 a year sounds like your kind of retirement, the next step is to work out how much super you will need to fund it.

Crunching the numbers

The tables below show the super balance required to provide a couple or a single person with annual income of $50,000. Using MoneySmart’s Retirement Planner we’ve calculated various scenarios, depending on how long you want your money to last and the average annual return on your super investments, net of all fees.

We also look at outcomes based on whether or not you will become eligible for the Age Pension at some point as your savings are run down.

For simplicity, we have not counted savings and investments held outside super. If you have significant outside savings, you will need less super. We also assume you own your home.


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The results are based on someone retiring at 67 but apply to anyone who is over Age Pension age (currently 66 years). All figures are in today’s dollars (adjusted for inflation), assuming an average annual 2% rise in the cost of living and an additional 1.2% rise in living standards per year.

Transfer balance cap

Also keep in mind that there is a $1.6 million transfer balance cap on the amount of money you can shift into a super pension account. Excess amounts will need to remain in a super accumulation account or outside super, where earnings will be taxed. The interaction of the transfer balance cap with other income and investments can be complex, so we advise you to seek professional advice.

The $1.6 million cap applies to individuals, which means a couple could have up to $3.2 million in individual accounts. However, if a couple has one account between them in a single name, the $1.6 million limit applies.

For more detail, go to SuperGuide’s Definitive guide to the $1.6 million transfer balance cap.

Where to go for more

For more information on the factors to consider when planning your retirement income needs, refer to the SuperGuide article How much super do I need to retire?

We hope that the figures in the tables below will get you thinking. The data in these tables is a small selection of possible outcomes. To plug in your own numbers, check out SuperGuide’s Income from super Reckoner which has nearly 9,000 options.


Disclaimer

This article is only intended to give approximate figures about the range of superannuation required to fund a retirement income of approximately $50,000 per year. These figures do not take into account any of your personal circumstances and are also based on projections about future investment returns which may not be achieved. We recommend that you undertake additional research for your own retirement planning, and wherever possible seek independent financial advice.


Couple – Super retirement balance needed to provide annual retirement income of $50,000

How long super to last? Eligible for Age Pension? Net returns (per year)
2% 3% 4% 5% 6% 7%
25 Years Yes $420,000 $370,000 $330,000 $290,000 $260,000 $240,000
No $1,530,000 $1,360,000 $1,200,000 $1,070,000 $960,000 $860,000
30 Years Yes $570,000 $460,000 $390,000 $330,000 $290,000 $260,000
No $2,030,000 $1,640,000 $1,420,000 $1,230,000 $1,080,000 $950,000
35 Years Yes $920,000 $620,000 $460,000 $380,000 $330,000 $280,000
No $2,720,000 $2,280,000 $1,690,000 $1,410,000 $1,200,000 $1,030,000

Single – Super retirement balance needed to provide annual retirement income of $50,000

How long super to last? Eligible for Age Pension? Net returns (per year)
2% 3% 4% 5% 6% 7%
25 Years Yes $1,200,000 $1,060,000 $940,000 $830,000 $740,000 $650,000
No $1,530,000 $1,360,000 $1,200,000 $1,070,000 $960,000 $860,000
30 Years Yes $1,490,000 $1,320,000 $1,160,000 $1,020,000 $900,000 $790,000
No $2,030,000 $1,640,000 $1,420,000 $1,230,000 $1,080,000 $950,000
35 Years Yes $1,980,000 $1,550,000 $1,370,000 $1,190,000 $1,030,000 $900,000
No $2,720,000 $2,290,000 $1,690,000 $1,410,000 $1,200,000 $1,030,000

Assumptions

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  • You own your own home and have personal assets of $25,000 or less.
  • These calculations do not allow any investment assets outside super. Note that the amount of investment assets you have can greatly affect the amount of Age Pension you are eligible for.
  • Inflation costs are a 2% rise per year in cost of living plus an 1.2% additional rise per year in living standards
  • You retire after you reach Age Pension age
  • All returns are net of fees
  • Results are in today’s dollars
  • We recommend you also review the assumptions that MoneySmart list below their calculator
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Learn more about how much super is enough in the following SuperGuide articles:

How to use the MoneySmart Retirement Planner

January 21, 2021

Super to income Reckoner

February 18, 2020

Income from super Reckoner

February 18, 2020

Is $500,000 in super enough to retire on?

February 11, 2020

Is $750,000 in super enough to retire on?

February 11, 2020

Is $1 million in super enough to retire on?

February 11, 2020

Is $1.6 million in super enough to retire on?

February 11, 2020

Is $2 million in super enough to retire on?

February 11, 2020

Is $3.2 million in super enough for a couple to retire on?

February 11, 2020

How much super do I need to retire on $40,000 a year?

February 11, 2020

How much super do I need to retire on $60,000 a year?

February 11, 2020

How much super do I need to retire on $80,000 a year?

February 11, 2020

How much super do I need to retire on $100,000 a year?

February 11, 2020

How much super do I need to retire?

February 11, 2020

How accurate are ‘retirement estimates’? 7 assumptions you need to understand

November 21, 2019

Falling behind with your super? How your super balance compares

October 2, 2019

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All information on SuperGuide is general in nature only and does not take into account your personal objectives, financial situation or needs.

You should consider whether any information on SuperGuide is appropriate to you before acting on it.

If SuperGuide refers to a financial product you should obtain the relevant product disclosure statement (PDS) or seek personal financial advice before making any investment decisions.

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