Retirement Calculator
Australian superannuation is a compulsory retirement savings system where employers must contribute 11.5% of ordinary time earnings into a complying super fund (the Super Guarantee increases to 12% from 1 July 2025). Contributions grow in a low-tax environment: earnings inside super are taxed at 15% (compared to your marginal rate outside), and withdrawals after age 60 are generally tax-free. The preservation age, when you can access super, is 60 for those born after 30 June 1964. The ASFA 'comfortable retirement' benchmark is approximately ,000 for a couple and ,000 for a single person (March 2025), assuming the Age Pension supplements the balance. The Age Pension age is 67 for those born after 1 January 1957. Voluntary concessional contributions are capped at ,000 per year (FY2024–25) and taxed at 15%. This calculator projects your super balance at retirement based on current balance, salary, contribution rate, and assumed investment return.
Frequently Asked Questions
How much do I need to retire?
A common rule of thumb is to have 25 times your annual expenses invested when you retire (the 4% rule). If you spend $50,000 per year, you'd need approximately $1.25 million. However, this depends on your actual expected expenses (including healthcare), other income sources like the age pension, your investment mix, and how many years of retirement you expect. The Association of Superannuation Funds of Australia (ASFA) estimates a comfortable retirement costs roughly $60,000 per year for a couple and $45,000 for a single person in 2024 dollars.
What is the 4% safe withdrawal rate?
The 4% rule suggests you can withdraw 4% of your portfolio annually with a low risk of running out of money over 30 years. With $1 million invested, that's $40,000 per year. The rule was derived from historical US share and bond market data and is considered conservative. In most historical periods, 4% withdrawals lasted 30+ years. However, some researchers suggest 3.5% or even 3% is more appropriate given longer life expectancies and lower expected future returns due to demographic changes.
At what age can I access my superannuation?
You can access your superannuation when you reach your preservation age (between 55 and 60 depending on your birth year) AND you retire. For those born after 1964, the preservation age is 60. Even after reaching preservation age, if you continue working you may not be able to access your super. Once you do retire, withdrawals are tax-free for those aged 60 and above. First home buyers can also access their super early under the first home super saver scheme.
Does inflation affect retirement savings?
Yes, significantly. Over 20-30 years of retirement, inflation erodes the purchasing power of your savings considerably. At 3% annual inflation, $100 today will only be worth approximately $74 in 10 years and $55 in 20 years in purchasing power terms. This means your retirement savings need to grow at least at the inflation rate to maintain their real value. During retirement, you may need to draw down capital as well as investment returns, making inflation management crucial for long-term sustainability.
How much should I contribute to super?
The compulsory super guarantee is 11.5% of your income as of July 2025, rising to 12% by 2026. However, salary sacrificing above this can be highly tax-effective due to the 15% contributions tax being lower than most people's marginal income tax rate. The annual caps are $27,500 for concessional (before-tax) contributions and $110,000 for non-concessional (after-tax) contributions. For someone on a $100,000 income, redirecting an extra $10,000 to super instead of taxed income can save thousands annually in tax.
What is the state pension?
The Australian Age Pension provides a basic income for retirees who meet residency requirements and reach pension age (currently 67). As of 2024, the full pension is approximately $1,116 per fortnight for a single person and $1,684 for a combined couple. Both an assets test and income test apply, meaning those with significant assets or income may receive a reduced pension or none at all. Most Australians with modest means receive at least a partial pension, substantially reducing the amount they need in superannuation to fund retirement.
Should I pay off my mortgage before retiring?
Many financial planners recommend being mortgage-free in retirement as it eliminates your largest ongoing expense and reduces the income you need to fund retirement. However, this depends on your interest rate, remaining loan term, and overall financial situation. If your mortgage interest rate is lower than expected investment returns, keeping the mortgage and investing the difference might be better. Additionally, if you have spare funds after maxing out superannuation contributions, using them to pay off a mortgage can be a sensible strategy. Consider your overall financial picture before making this decision.