How Much Does the Average Australian Retire With? The Truth About Retirement Savings in 2025

Thinking about retirement keeps me up at night sometimes. Will I have enough? Am I saving enough? What’s normal anyway? If you’re wondering how your nest egg compares to others, you’re not alone. Let’s dive into what the average Australian actually retires with and whether it’s enough for a decent lifestyle.

The Real Numbers: Average Retirement Savings in Australia

The most recent data shows that the average superannuation balance for Australians aged 60 to 64 (close to retirement) is $361,539. The median balance is $183,524.

But here’s where it gets interesting – there’s a pretty big gender gap:

• Men have an average balance of $402,838 (median $211,996)
• Women have an average balance of $318,203 (median $158,806)

That’s a difference of over $84,000 on average! This gap reflects the persistent gender pay disparity and career breaks that many women take for caregiving responsibilities

What’s the Difference Between Average and Median?

I believe it’s important to make something clear: the average (mean) can be misleading because it includes very wealthy individuals who push the numbers up. The median, on the other hand, is probably a better reflection of the “average” Australian’s retirement savings; it’s the number where half of the people have more and half have less.

So while the average might look decent, the median tells us that half of Australians approaching retirement age have less than $183,524 in their super That’s a bit concerning when you think about it

Retirement Age in Australia: When Are We Calling It Quits?

Based on the most current data from the Australian Bureau of Statistics (2022-23 financial year):

• There were 4.2 million retirees in Australia
• The average age at retirement (of all retirees) was 56.9 years
• However, for recent retirees (those who retired in 2022), the average retirement age was 64.8 years
• Men typically retire later (66.9 years) than women (63.2 years)
• People are planning to retire at 65.4 years on average

Interestingly, the retirement age has been creeping up over time. In the 1980s and 1990s, many Australians retired in their late 40s or early 50s. Now, most are working until their mid-60s.

What Income Do Retirees Actually Live On?

This is where things get practical. The Association of Superannuation Funds of Australia says that retirees will need the following in 2024:

For Singles:

• $32,915 per year for a modest lifestyle
• $51,630 per year for a comfortable lifestyle

For Couples:

• $47,387 per year for a modest lifestyle
• $72,663 per year for a comfortable lifestyle

These figures assume you own your home outright. If you’re renting, you’ll need significantly more.

Where Does Retirement Income Come From?

Retirement income isn’t just from super. According to the ABS data:

1. Age Pension remains the most common form of income for retirees (53% of retired men and 46% of retired women rely on it)
2. Superannuation pensions are the second most common source (35% of retired men and 33% of retired women)
3. Partner’s income is significant for many women (31% of retired women rely on their partner’s income compared to just 8% of retired men)
4. No personal income – About 18% of retired women and 4% of retired men have no personal income

Is the Average Australian Retiring With Enough?

Let’s do some quick math. If we use the 4% rule (a common retirement withdrawal strategy where you take 4% of your savings each year), the average Australian with $361,539 could generate about $14,462 per year.

When you add in the Age Pension, which is about $26,000 a year for a single person, you get about $40,462 a year, which is between the minimum and maximum amounts needed to live a comfortable life.

But remember that’s the average. With median super balances much lower, many Australians would be primarily reliant on the Age Pension.

The Retirement Savings Gender Gap

I can’t stress enough how concerning the gender gap in retirement savings is:

• Women retire earlier (63.2 years compared to 66.9 years for men)
• They live longer (about 4-5 years longer on average)
• They have less super ($318,203 vs $402,838)
• They’re more likely to have no personal income in retirement (18% vs 4%)
• They’re more reliant on partners’ income (31% vs 8%)

This creates a perfect storm for financial insecurity among elderly women, and it’s something we need to address as a society.

Factors That Influence Your Retirement Savings

Several key factors determine how much you’ll have when you retire:

• Age you started saving: The magic of compound interest means early starters have a huge advantage
• Income level: Higher earners generally accumulate more super
• Career breaks: Time out of the workforce means missed contributions
• Investment choices: Conservative vs growth investment strategies
• Voluntary contributions: Whether you’ve topped up your super with salary sacrifice or personal contributions
• Industry: Some industries have better super schemes than others
• Self-employment: Self-employed people often have lower super balances

How Much Super Do You Actually Need?

This is the million-dollar question (sometimes literally!). Most financial experts suggest you’ll need between 15-25 times your annual expenses saved for retirement.

So if you want to spend $50,000 per year in retirement, you might need between $750,000 and $1.25 million in savings and investments.

But this varies based on:

• Whether you own your home
• Your health needs
• Your lifestyle expectations
• Whether you’ll receive the Age Pension
• How long you live

Retirement Withdrawal Strategies

Once you’ve built your nest egg, how do you use it? There are several strategies:

1. Account-Based Pension: Complete access to your super once retired, with tax-free investment earnings
2. Annuity Income Streams: A guaranteed income for life based on your lump sum investment
3. Bucket Strategy: Structuring investments to ensure expenses can be met with cash-based investments
4. Transition to Retirement: Limited access to super as an income stream while still working

What Can You Do If You’re Behind on Retirement Savings?

If your super balance isn’t where you’d like it to be, don’t panic! There are several strategies to boost your retirement outlook:

1. Delay retirement: Working a few extra years can significantly increase your super
2. Maximize contributions: Use salary sacrifice or personal deductible contributions
3. Catch-up contributions: Use the “carry-forward” rule if eligible
4. Review investment options: Ensure your super is invested appropriately for your age and risk tolerance
5. Reduce fees: High fees can eat away at returns, so shop around
6. Consider downsizing: Putting up to $300,000 from the sale of your home into super
7. Plan for the Age Pension: Understand how the assets and income tests work

State Differences in Retirement

Interestingly, there are significant differences in retirement patterns across Australian states:

• South Australia has the highest proportion of retirees (46% of population aged 45 years and over)
• Northern Territory has the lowest (22%)
• Queensland had the greatest increase in retirees between 2020-21 and 2022-23 (+32,000)

Industry Differences in Retirement Age

Your industry also affects when you’re likely to retire. People in Agriculture, forestry and fishing have the highest average intended retirement age (68.3 years), while those in Mining intend to retire earliest (63.7 years).

The Future of Retirement in Australia

As life expectancies increase and the population ages, we can expect:

1. Further increases in the retirement age
2. Greater emphasis on self-funded retirement
3. Potential changes to the Age Pension eligibility
4. More flexible work arrangements in later life

Final Thoughts

So, how much does the average Australian retire with? While the average super balance of $361,539 might sound decent, the median of $183,524 shows that many Australians are retiring with far less.

For most Aussies, retirement will involve a combination of super, Age Pension, and perhaps other investments or part-time work. The reality is that many will rely heavily on the Age Pension.

If you’re concerned about your retirement outlook, I’d suggest speaking with a financial advisor. They can help tailor a strategy specific to your circumstances and goals.

And remember, it’s never too late to improve your retirement situation, but the earlier you start, the easier it will be. Even small changes now can make a big difference to your future financial security.

What’s your retirement number? Are you on track to reach it? I’d love to hear your thoughts and experiences in the comments below!

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Disclaimer: This article provides general information and should not be considered financial advice. It’s essential to seek personalized advice from a qualified financial advisor before making any investment decisions.