How much do I need to retire in Australia?

Middle-income workers in their 20s, 30s and 40s need to have a much higher super balance to enjoy a comfortable retirement if they remain single.

The Association of Superannuation Funds of Australia recommends $595,000 for a comfortable retirement by the time someone turns 67 and becomes eligible for the age pension.

This would be enough for an occasional holiday abroad or a new car every few years for someone who has paid off their house.

To achieve that, someone with an average pre-tax income of $65,000 would need to have $220,000 in super savings by age 45.

But someone earning $90,000 a year – a level slightly below the average full-time salary of $95,581 – only needs $176,000 in retirement savings.

That’s a 25 percent difference in the super required between a middle income and an average income.

Middle-income workers in their 20s, 30s and 40s need to have a much higher super balance to have a comfortable retirement if they remain single (pictured are young women at Sydney’s Royal Randwick Racecourse)

The requirement to have a lot more in super is even more apparent at age 30.

A middle-income earner needs $68,000 in super savings, compared to just $8,000 for someone on a $90,000 salary.

That means someone with an income of $65,000 would need to have eight and a half times the super level.

Earning a salary of €90,000 at a young age also helps because even at age 25, super is not needed to have a comfortable retirement.

But a middle-income earner with an income of $65,000 should have saved $29,000 in super money by the time he or she was 25.

The mandatory employer super contribution is 11 percent and will be increased by half a percentage point every year on July 1, reaching 12 percent in 2025.

ASFA said this meant most young people were on track to have enough saved for a comfortable retirement, as more went to super instead of future pay rises.

The Association of Superannuation Funds of Australia recommends $595,000 for a comfortable retirement by the time someone turns 67 and is eligible for the Age Pension (stock photo shown)

“Younger Australians who will receive contributions of 12 percent of their wages for most of their working lives are much more likely to be on the right track,” the report said.

For couples, ASFA recommends $690,000 for a comfortable retirement.

But even $100,000 is a very modest pension for a single person or a married couple on an old-age pension, provided they owned their home outright.

The median super balance for men aged 66 is $216,000, compared to $202,000 for women of the same age.

Super Consumers Australia recommends $258,000 for a modest retirement, which would mean taking a holiday to Australia instead of going abroad every few years.

Australians can sacrifice their salaries to have more of their wages go into super, and pay a low concessional tax rate of 15 percent.