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Our new targets for your super in retirement

Super Consumers Australia is developing new guidelines based on the actual spending of Australians in retirement.

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Last updated: 03 March 2022
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Fact-checked

Checked for accuracy by our qualified fact-checkers and verifiers. Find out more about fact-checking at CHOICE.

Need to know

  • Super Consumers Australia is looking for feedback on our new financial targets for retirement, which show what retired Australians are actually spending
  • These targets will provide an independent and realistic set of figures to help you plan for retirement

Why we need a new set of targets

Our research found one of the key questions Australians have about their retirement is 'how much will I need'? 

We're working to find the answer, based on the actual spending of retired Australians.

"By drawing on data that shows what retirees actually spend, we're hoping our new targets give working Australians a good rule of thumb so they can confidently plan for retirement, says Super Consumers Australia director, Xavier O'Halloran.

"We also want to give retirees the confidence to safely spend down their retirement income – with a better idea about whether they are over or under spending."

See our retirement targets consultation paper.

Our research shows that a middle-income home owning Australian couple aged 57 only needs approximately $400,000 between them by the time they're 65. See the table below:

Debunking existing information

Representing the superannuation industry, the Association of Super Funds Australia (ASFA) has published their widely-used Retirement Standard, but the expert view is that these standards may be misleading. 

You may have seen media reports that say you need one million dollars for a comfortable retirement. Our targets show this figure is misleading

Xavier O'Halloran, Super Consumers Australia

The Productivity Commission said these standards equate to a retirement income that is "more than many people spend before retirement" and that they are "no more than an arbitrary benchmark that should be ignored in policymaking".

Why misleading targets matter

So, why does it matter if the existing financial targets are wrong? The Retirement Income Review (RIR) noted that meeting the ASFA Retirement Standard would require a "substantially lower standard of living during working life" for a middle-income earner. 

In other words, if you're a middle-income earner, you would need to make significant cuts to your current spending to save enough for retirement for the ASFA standard.

The good news

Our targets found middle-income people will need less for a comfortable retirement than the existing AFSA Retirement Standard suggests. 

The RIR's analysis of data from the Household, Income and Labour Dynamics in Australia (HILDA) survey supports this finding. It said that 88% of recent retirees reported being financially satisfied or neutral about their finances.

The fact that most retirees maintain their spending levels and are satisfied with their lifestyle suggests that using actual spending, rather than aspirational targets, is a more useful measure

Similarly, a large majority of retired Australians are happier than they were during their working life. 

The fact that most retirees maintain their spending levels and are satisfied with their lifestyle suggests that using actual spending, rather than aspirational targets, is a more useful measure.

Tough for renters

Many retired renters face income poverty and financial stress in retirement.

We've previously highlighted how rental assistance is insufficient for this growing group of Australians. For this reason, our guidelines don't include targets for retired renters. We think that systemic change, such as increased social housing and rent assistance, is more important to this group than aspirational targets.

You can, however, give us feedback on this aspect of the targets and whether you think it's feasible and viable to create separate targets for renters.

Independent advice

"I've used (retirement) calculators before, but they are from super funds themselves," says one of the participants in our research. "You always wonder (is) this based on actual people".

A vital point about the targets we have developed here at Super Consumers Australia is that they're independent – they're not from a super fund or an industry group with a vested interest in getting you to contribute more to your super. 

This content was produced by Super Consumers Australia which is an independent, nonprofit consumer organisation partnering with CHOICE to advance and protect the interests of people in the Australian superannuation system.

We care about accuracy. See something that's not quite right in this article? Let us know or read more about fact-checking at CHOICE.