Luke Jensen May 2, 2024 - 7 min read

Why ‘how much do I need to retire?’ is the wrong question

This is one of the most important questions clients ask me. And naturally, working out the answer to this question is an important part of what I do as a financial adviser. However there is an even more important question that needs to be answered first – what do you want your retirement to look like?

Why not start with how much do I need to retire?

When considering future retirement, many people start by asking how much they’ll need to retire and refer to resources such as the ASFA Retirement Standard. This is a standard published by The Association of Super Funds of Australia (ASFA) which calculates the Superannuation balances required to achieve a comfortable retirement. At the time of publication, this is $690,000 for a couple or $595,000 for a single. This is based on retirement at age 67. So now you might have a super fund balance and a retirement age to aim for, but what’s your ‘comfortable’ retirement going to be like? And what if you want to retire before 67?

So what is a comfortable retirement?

What a comfortable lifestyle is for you is likely to be very different to the next person. So it’s important to understand what ASFA’s definition of comfortable means before you decide that a balance of $690,000 will do the trick.

According to ASFA, a comfortable retirement is:

The comfortable retirement standard allows retirees to maintain a good standard of living in their post work years. It accounts for daily essentials, such as groceries, transport and home repairs, as well as private health insurance, a range of exercise and leisure activities and the occasional restaurant meal. Importantly it enables retirees to remain connected to family and friends virtually – through technology, and in person with an annual domestic trip and an international trip once every seven years. (Source: ASFA, June 2023 ).

If reading this makes you feel uncomfortable, it’s probably an indicator that what’s defined as comfortable may not actually apply to you and your retirement goals. This is the case for the majority of our retired clients, for whom the ASFA-defined ‘comfortable’ super balance is considerably less than what they need to fund their desired retirement.That’s why it’s so important to understand what you want your retirement to look like first.

Start with your retirement goals

Effective retirement planning starts with mapping out your retirement goals. For many people, it’s about maintaining their current lifestyle, but retirement can enable you to really focus on the things you enjoy most – and those things may cost more or less than your current activities.

We take you through a process to help you understand what really matters first. Then we help you understand what level of income you require each year to achieve your desired retirement lifestyle, and then what level of capital you need to accumulate to generate that income.


  1. What do I want my retirement to look like?
  2. How much income per year will that require?
  3. How much capital do I need to generate that income?


There is, of course, the reality that what you desire in retirement may not always be achievable based on your current path, and then the process of understanding priorities begins again. You may need to consider adjusting your planned retirement age, or you may need to reduce some spending now to save more for the future. Understanding the variables of time, savings, and spending allows each and every client to make a conscious decision to adjust. And many clients find that once they are clear on their priorities, they’re typically more willing to make any required sacrifices today in order to achieve them. You may also discover that you are well on track towards your retirement goals and can consider retiring sooner (if that’s important to you!).

The important outcome is that your retirement lifestyle will be determined by you and your unique needs, and all possible options can be explored. In any case, you won’t simply be aiming for a super balance that gives you someone else’s definition of a comfortable retirement and a prescribed retirement age.

It’s never too early to plan your retirement

And remember, it’s really never too early to start thinking about your retirement plans. The more time you have, typically the more options you have. You can learn more about this in our article When should I start planning for retirement?.

If you would like to discuss your ideal retirement and what an achievable, holistic plan can look like for you, please feel free to contact us and we can have an obligation-free chat.