The question of how much a person needs to have saved before confidently launching into their retirement years very much requires an individual answer. Each one of us lucky enough to reach the brink of those golden years will feel a lot better doing so with some assurance that we’ve squirrelled enough away to be comfortable in retirement.

The answer to the above question is made all the more complicated by several unknown factors, as no-one knows, for example, how long they will live or what medical necessities could surface to strain the coffers.

Some guidance is available however from Super Guru, a website run by the non-profit Association of Superannuation Funds of Australia (ASFA). Super Guru releases a “retirement standard” every quarter. This is a benchmark for the annual budget needed by Australian individuals and couples to fund either a “comfortable” or “modest” standard of living in their post-work years.

The updated quarterly figures reflect inflation and provide an objective outline of the budgets that singles and couples would need to spend to support their chosen lifestyle.

Super Guru’s release of figures up to 30 June 2018 shows that the super accumulation balances needed for a “comfortable” retirement are $545,000 for singles and $640,000 for couples. In annual pension payout terms, this equals $42,953 and $60,604 respectively. Details of what these amounts mean for spending capacity are shown in the table on the following page.

By way of comparison, note that the government Age Pension base rate (before payment of supplements) is $21,222 for singles and $31,995 for a couple. “The Age Pension is designed to provide a ‘safety net’ for those who do not have enough superannuation or other financial resources to provide an adequate retirement income. So the Age Pension works in conjunction with superannuation,” Super Guru says. “Most people – women in particular – will continue to be eligible for a full or part Age Pension, supplemented by whatever superannuation benefits they receive.”

ASFA notes that as people age, their spending requirements also change. It estimates the net impact of the various factors at play mean that by age 85 annual budgets would reduce by around $1,000 a year for “modest” lifestyles, and $5,000 a year for “comfortable” lifestyles.

As far as measuring what these different lifestyles entails, Super Guru has produced the following comparison table (and includes a retiree taking the Age Pension only — see overleaf).

ASFA’s estimate for retirement savings