Four in ten Australians believe they need more than $1 million in superannuation to retire comfortably, despite industry benchmarks indicating significantly lower balances are required.
New polling released alongside the latest Retirement Standard from Association of Superannuation Funds of Australia (ASFA) found 42 per cent of Australians think they need more than $1 million in super to fund a comfortable retirement.
This compares with the Retirement Standard benchmark of $730,000 for a couple and $630,000 for a single person.
The latest Retirement Standard showed homeowners aged 65 and over now require annual spending of $78,566 for a comfortable retirement as a couple and $55,923 as a single.
These budgets increased by 1.5 per cent and 2.0 per cent respectively over the March quarter, compared with a 1.5 per cent rise in the Consumer Price Index over the same period.
ASFA chief executive Mary Delahunty said cost-of-living pressures were influencing how Australians viewed retirement.
“Inflation is changing how Australians think about their financial futures. When households really feel the pressure of grocery, petrol, energy and other bills keep climbing, people naturally assume that retirement will cost a fortune,” she said.
“But the reality is that retirement generally costs less than working life. Retirees pay no tax on superannuation pension income after 60, most own their home outright, work-related costs disappear, and concessions reduce the price of energy, medicines, transport and council rates.”
Housing affordability concerns appeared to be driving much of the gap between expectations and benchmarks, particularly among younger Australians.
Among those aged 25 to 34, 51 per cent believe they will need more than $1 million in today’s dollars to retire comfortably, while 23 per cent expect they will require more than $2 million.
Similar views were held by Australians aged 35 to 49, with 52 per cent believing they need more than $1 million and 22 per cent expecting they will need more than $2 million.
Retirement expectations eased among older cohorts. Among Australians aged 50 to 64, 40 per cent believe more than $1 million is required, falling to 29 per cent among those aged 65 and over. The proportion expecting to need more than $2 million declined to 11 per cent and 8 per cent respectively.
Delahunty said concerns about entering retirement without owning a home were weighing on younger generations.
“For a long time, the assumption was that you would own your home by the time you retired. For many younger Australians, that feels like a much less attainable reality.
“House prices have diverged significantly from wages over the last two decades, and many people now expect to carry rent or mortgage payments into retirement. It makes sense that they believe they will need much more in super than earlier generations did.
“Homeownership is an important aspect of dignity in retirement, alongside the financial security that comes from retirement savings. Addressing the housing affordability crisis, so that we start improving access to homeownership for younger generations of Australians, is a crucial public policy goal,” Delahunty said.
The Retirement Standard also highlighted the continued impact of rising essential costs on retirees. While headline inflation rose 4.6 per cent in the 12 months to the March quarter 2026, several key expenses increased at a much faster pace.
Electricity prices rose 25.4 per cent over the year following the expiry of energy bill relief subsidies, while automotive fuel increased 24.2 per cent. Coffee and tea prices climbed 10.7 per cent, beef rose 11.8 per cent, water charges increased 7.1 per cent and property rates rose 6.2 per cent.
ASFA also outlined indicative superannuation balances for Australians aiming to achieve the comfortable retirement benchmark for singles.
Based on a future pre-tax income of $100,000 a year indexed to inflation, the suggested balances are $98,000 at age 40, $248,500 at age 50, $342,000 at age 55, $449,500 at age 60 and $574,000 at age 65.
