The amount of superannuation you should have at age 40 is based on how much money you need to have at retirement. That, in turn, is based on how much money you expect to spend each week during your retirement. That, in turn, depends on whether you expect to lead a modest retirement or a comfortable retirement.
The Association of Superannuation Funds of Australia (ASFA) estimates you would need the following amount per week:
Lifestyle |
Singles |
Couples |
Modest |
$465 |
$668 |
Comfortable |
$837 |
$1,150 |
Here is the superannuation balance you would need to fund that level of spending:
Lifestyle |
Singles |
Couples |
Modest |
$50,000 |
$35,000 |
Comfortable |
$545,000 |
$640,000 |
These figures come from the March 2017 edition of the ASFA Retirement Standard.
The reason people on modest lifestyles need so much less money is because they qualify for a far bigger age pension.
Here is how ASFA defines retirement lifestyles:
Category |
Comfortable |
Modest |
Age pension |
Holidays |
One annual holiday in Australia |
One or two short breaks in Australia near where you live |
Shorter breaks or day trips in your own city |
Eating out |
Regularly eat out at restaurants. Good range and quality of food |
Infrequently eat out at restaurants. Cheaper and less food |
Only club special meals or inexpensive takeaway |
Car |
Owning a reasonable car |
Owning an older, less reliable car |
No car – or, if you do, a struggle to afford the upkeep |
Alcohol |
Bottled wine |
Casked wine |
Homebrew beer or no alcohol |
Clothing |
Good clothes |
Reasonable clothes |
Basic clothes |
Hair |
Regular haircuts at a good hairdresser |
Regular haircuts at a basic salon |
Less frequent haircuts or getting a friend to do it |
Leisure |
A range of regular leisure activities |
One paid leisure activity, infrequently |
Free or low-cost leisure activities |
Electronics |
A range of electronic equipment |
Not much scope to run an air conditioner |
Less heating in winter |
Maintenance |
Replace kitchen and bathroom over 20 years |
No budget for home improvements. Can do repairs, but can’t replace kitchen or bathroom |
No budget to fix home problems like a leaky roof |
Insurance |
Private health insurance |
Private health insurance |
No private health insurance |