David Koch: How much super do I actually need to retire comfortably? Is it a million dollars? Is it less? Is it more? And how do you know if you're actually on track?
Peter Hoban: I actually normally answer that question with another question, “how much is it that you're going to spend?” Because once you've figured out how much it is that you're going to spend, that's when we're able to work back and find that starting figure that you need.
David Koch: G’day and welcome to In the Hammock, the podcast and video series designed to support you and your superannuation with Brighter Super experts helping you build confidence on your path to retirement. We're here to make super and retirement feel a whole lot simpler. I'm David Koch, joining me now is Peter Hoban, Member Account Manager at Brighter Super. Pete, thanks for joining us.
Peter: David, good to see you.
David: All right, we're going to cover a whole lot of things today. Do you really need the million dollars as we sort of flippantly talked about at the start? Why two people retiring can be totally different and have totally different circumstances. The great fear about running out of money, is that an issue at all? So, Pete, let's start with a big one. Everyone throws a magic number around. Run us through that process to start with.
Peter: Everything that you and I are going to talk about is just factual information and general advice only. For anyone who is listening, if they are going to act on anything, I would really encourage them to consider their personal circumstances or seek advice. Well, a great place for people to start when they are thinking about their income is what's called the ASFA Retirement Standard. So, there's an organisation out there called ASFA, the Association of Super Funds of Australia, ASFA. And every quarter they survey retirees and get an idea of what it is that they're spending. And they do break those income levels down to a modest and a comfortable retirement. You can log onto or join the ASFA website and you'll be able to see some detailed budget breakdowns down there.
David: Just jumping in. That's a really good place to start, isn’t it? And the fact they break it down, you can look at it yourself and go, "I won't spend that amount on restaurants, but I'd like to spend more on travel or, hey, I'm a golfer and I go on golfing trips. I need a bit more here than there." That's what you've got to use that as, isn't it? Almost a little starting point for you to fiddle around and think about.
Peter: There's about 50 or 60 different line items in that retirement standard and I could use it to work out where my money was going. And once I'd figured that out, then I was able to work out how much it was I was going to need in the future.
David: Like anyone that says to me, "I don't need to do a budget. It's all in my head." I always say to them, "Write it down because I would think you might be surprised when you see it in black and white." So, what are some of the big questions you should be asking yourself in terms of putting that plan into action, sort of using the budget for your retirement?
Peter: People really need to start thinking about what is it that they're going to do once they retire. Most people are going to work eight hours a day, five days a week, 48 weeks a year. If you're not turning up to a job, that is a lot of time that you're going to fill. But people can really get a benefit from sitting down and thinking about, if I had this amount of time available to me, how would I spend it if I had the absolute choice?
David: Okay. So, it's questions like, how long will I be retired for? Do I have a house or not? Do I have a mortgage? Are they some of the things you got to consider?
Peter: People's income changes when they retire, but also their spending habits might change when they retire. Most people who have retired tend to tell me in that first 12 months they've never been busier. I say, "I don't know how I found the time to go to work." But being that busy does come with an expense. So, they normally notice that their spending may spike a little bit in that first 12 months. It might be doing some renovations, paying down some debt. A holiday.
David: It's a honeymoon. A retirement honeymoon.
Peter: Particularly if you've just received access to your superannuation, tens, maybe hundreds of thousands of dollars available for you. So, spending can spike a little bit in that first 12 months, but then normally years two or three, people start to find their feet a little bit. Those big expenses are out of the way, maybe still doing a bit of travel, but they're starting to formulate an idea of what retirement's going to look like. And I'd probably say by about year five, most people have settled down into their routine and they're comfortable with this new lifestyle.
David: So, Pete, what does ASFA actually say are the figures you need to retire on?
Peter: Well, this is the March quarter 20261. And what they're saying for a couple to have a comfortable retirement, looking at a weekly expenditure of just over $1,500 per week, or about $78,500 per year. For a modest lifestyle for that couple, looking at about $1,000 a week or 52 odd thousand dollars a year. For singles who are looking for that comfortable lifestyle, it's a little bit less, just under $1,100, or about $56,000 a year. And for a single for that modest lifestyle, just a touch under $700 a week or $36,500 per year.
Now to generate that level of income, if you are looking for a comfortable retirement, a couple's probably going to need a balance of about $730,000 and a single person probably looking at a balance of about 630,000. If people are more leaning towards that modest retirement, a couple's probably looking at about $120,000 and a single of about $110,0002.
Now these figures are actually updated. So if anyone does want to keep track of them, we've included the link to the ASFA Retirement Standard in the show notes.
David: And I suppose you've got to bring in, if you like, big family or life questions, is that do you want to leave any inheritance to your kids? Do you want to help kids with mortgages or buying a house or deposits? You've got to factor that in as well?
Peter: Absolutely. Some of those big, I guess, lump sum withdrawals, you'd call them, really can impact the income that you're able to generate in the future, but a lot of people weigh that up against the pleasure that they get from being able to provide that assistance. They might be able to have that money in a bank account or in a superannuation fund earning a little bit of interest, but the emotional satisfaction that they get from being able to help their children make that change is worth more to them than any sort of income could be.
David: And you mentioned a bit earlier that you've got to take into account when you're doing your budget that your spending habits do change within retirement.
Peter: I do find, again, in that first few years, people are sometimes overly cautious. They actually overestimate how much it is that they think they're going to have to spend. One of the things we can talk about a bit later is when you set up a Pension Account, you are required to take a payment from it and people actually overestimate how much it is.
David: Let’s expand on that a bit as well without getting too technical. How should people think about turning a super balance into an income stream for them?
Peter: Sure. Well, an important starting point is that once people are over age 60, there's no tax on anything they take from super3. So, it doesn't matter whether they're taking it as a lump sum withdrawal or they're setting up regular payments from an income stream. Another important point is you don't actually have to take anything out of superannuation. People can stop work and they can just leave their money in an accumulation account for as long as they like. Investment earnings in accumulation accounts are actually concessionally taxed. They're only taxed at 15%, but most people do look at moving their money from an accumulation account into a Pension Account.
David: Which is only natural, isn’t it? You're used to getting a wage and a regular income, so it sort of helps with that not changing your habits too much in retirement.
Peter: And that's why most people look at setting it up into a Pension Account or an Income Stream Account. It's still invested; it's still working for you. And from there, people can choose how much it is they want to get paid, what the payment frequency is. So quite often I'll see people when they do retire, maybe set up a fortnightly payment because that helps them ease from receiving an income from an employer.
When people do set up a pension account, you do need to take a payment from it. So, for anyone up to age 65, it's 4% of the balance. Easy sums on that. If someone opens up a Pension Account with $300,000, that's only $12,000 that they have to take in a year. Most people will access more than the minimum that they're required to.
David: Okay. So, if someone has $300,000 versus $700,000 versus a million, what difference does it make in practical terms?
Peter: Interestingly, not as much as people might think. The income that they might be able to generate might be quite similar but where it's coming from might be different. The people with that smaller balance may be receiving more from the Age Pension and topping it up with less from their super, whereas the people with that larger balance might be drawing more from their super and topping it up with a little bit less from the Age Pension.
David: Because that's where comparisons get really dangerous. You're just pointing that out. A lot of people have the fear that it's too late to do anything. What's the biggest differences in retirement to achieving that outcome?
Peter: Well, the sooner you can get started, obviously the better, but it is never too late to start making an impact to your superannuation. A member that I was just speaking to earlier this month4. She was age 55, earning about $80,000 a year. The mortgage had just been paid off. That was a huge milestone that had been taking a lot of her attention, and her kids had just thankfully moved out. That was something she'd been looking forward to for a while. So, she had a bit of disposable income. She’s 55 and she was thinking about retiring at about age 60. There were some things that she wanted to do. So, she actually started salary sacrificing about an extra $100 a week. She was able to reduce her taxable income, but it also meant even over that five-year period, there was probably going to be more than 20 odd thousand dollars available for her in her superannuation than if she hadn't done that. And that amount of money was actually what she was going to use for that big overseas trip.
David: So small increases in contributions can make significant differences. Time invested in the market is significant. They're the things people should be aware of in terms of planning. And also, almost focusing on the housekeeping of your superannuation can make a big difference, can't it as well? Sort of understanding fees, consolidating accounts, regularly checking in.
Peter: Absolutely. Yeah. One thing that I'm not fond of is when people do say, "I'm set and forget.” It's usually a huge asset, probably more than people have got sitting in their bank accounts and I'm sure people don't ever set and forget their bank accounts. If you do start planning earlier, if you find that you do have to make some changes, it's a lot easier to do them over a longer period of time than trying to cram it into a short few-month period.
David: And taking an interest like the tools that you have available for members, the calculators. Looking when you get a statement to your investment options and analysing those, they all make a big difference, don't they?
Peter: Absolutely. I can understand why people might be a bit wary of just picking up the phone and speaking to a superannuation fund, particularly if they've never had a lot of contact from them. They've received the statement, opened it, put it on top of the fridge, maybe glanced at it every now and again. So that's where doing a bit of the research yourself, using online tools. Brighter Super has a Retirement income calculator where you can put in your super balance, the contributions that you make, your age, your desired retirement age and it can give you a bit of an idea of what sort of income you might be able to generate. The thing I really love about our Retirement income calculator is you can change the settings. So, what if I do increase my contributions? What if I do work a year longer or retire a year earlier? What impact is that going to have on my retirement income?
We've also got another calculator called What age can I retire? calculator, which is probably the number one question that I do get. But this is where, again, people can put in what their desired income is, and we can work it out on a timeframe of when someone may be able to retire and generate the income that they need.
David: You talk to so many members each and every day. What are some of the common mistakes, the biggest mistakes that you see them making?
Peter: One of the biggest mistakes I see people make is they ask me, what do most people do? It's your retirement that you're planning. It's not your neighbour’s retirement. It's not your boss. It's not your colleague. It's your retirement, your planning. The other mistake that I see people make is just thinking that it's all too hard. There is a lot of assistance out there. Brighter Super offers Super Health Checks. So actually, the opportunity to review things like your contributions, your investment options, the insurance that you might have, help you find any lost super that might be out there. And that's what engaging your superannuation fund can do. Just letting you know when it is that you can access your super. Plenty of people I speak to think they have to wait till age 67. They're sometimes shocked when they discover that it's age 60 that they can generally start accessing their super.
Even if they're still working, they might be able to access some of their super at age 60. So, it's finding out about what your options are so that you can then start your planning.
David: Do you find people go to cash too early?
Peter: I do find that when people are getting closer to retirement, their risk tolerance falls. They're really starting to get nervous. And when people do talk about investment risk, people focus on volatility. Whereas another side of investment risk is not actually generating the returns that you need to give your superannuation that longevity.
David: You can get too conservative, because retirement's a long time now, isn’t it?
Peter: If you're retiring at age 60 and you're potentially living to age 100, it's fine having a healthy balance to start with, but you really do need to make sure that it's going to generate the returns that you need so your super has the longevity to match your lifespan.
David: Yeah. Pete, some great advice. So, for anyone listening or watching this podcast, what are the big takeaways, important takeaways you think they should be acting on now?
Peter: Well, start thinking about your retirement. Make that plan. Breaking it up into the smaller pieces is the way to go. You don't need to spend a lot of time. It's just being aware of how much am I contributing into my super? How is it invested? What are the fees that I'm paying? Do I have insurance that I might not need to be paying for? People feel great that they've ticked that off their list. Then they can start putting some of their energy into that forward planning and the really fun part of thinking about retirement.
David: Yeah, it is great advice. It's been fantastic chatting, Pete. Thanks very much for joining us.
Peter: David, it’s a pleasure.
David: And thank you to you for watching. If you found this helpful, give it a like and share it with someone who's thinking about retirement and make sure to follow or subscribe to watch or listen to future episodes and keep building your confidence on your path to your brighter retirement.
1 Source: ASFA Retirement Standard March 2026 quarter for those aged 65-84. March2026-RS-Tables.pdf Totals may not exactly equal the sum of components due to rounding of price adjustments
2Source: ASFA Retirement Standard, updated February 2026. Savings required for retirement at age 67. The estimated balances required at retirement are based on the assumption of a retired single person or a couple who own their own home and are without significant medical expenses and non-financial assets of $25,000 (home contents/car) and non-cash/other assets. The calculations include allowance for estimated eligible Age Pension entitlements. The economic assumptions used in the calculations include an average return on account-based pension balances of 6% p,a. (based on Balanced pension option net of investment fees and 0.14% p.a. administration fees), 2.75% p.a. inflation of retirement income and Age Pension means testing thresholds and 2.5% p.a. inflation of maximum Age Pension payment rates. These standards are used for illustrative purposes only. We recommend seeking personal advice prior to making any financial decisions.
3 You need to meet a condition of release before you can withdraw your super after age 60.
4This example is shared for illustrative purposes only and does not factor in fees or investment returns.
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