Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 218

Big data reveals how retirees really live

The superannuation industry isn’t quite sure what a comfortable retirement is, even as it desperately works to help members achieve that elusive goal.

It’s no surprise given the complexity of the task, which is affected by lifespan, personal expectations, government legislation, savings rates, market performance and more.

Many different opinions

But the problem is that members are likely to become disengaged and lose trust when they read conflicting articles about how much they need to save such as:

  • A couple will need about $640,000 in super savings to have a comfortable retirement.
  • A couple that saves at least $1 million in super will only generate about two-thirds of their pre-retirement income.
  • A couple needs about $1.5 million in super to generate an income equivalent to average weekly earnings.
  • A professional couple will need about $2 million in super at retirement.

These numbers stand in stark contrast to the median super balance at retirement (for those aged 60 to 64 years of age) of just $100,000 for men and $28,000 for women. Whatever estimate is chosen for a comfortable retirement, it’s out of touch for at least half the population.

The current crop of widely-ranging estimates also leaves much to be desired for wealthier Australians. Super accounts for just a small component of net household wealth according to the Productivity Commission and wealthier people tend to have more assets outside of super. It’s just not possible for super funds to estimate the level of super their members require when they don’t know the level of non-super assets they have and how they’re being used.

The amounts many Australians actually spend

Milliman’s quarterly Retirement Expectations and Spending Profiles (ESP) provide that type of information by analysing 300,000-plus retirees’ spending data.

The Retirement ESP shows that Australians aged 65 to 69 spend a median of just $31,068 (from all sources including super, non-super savings and government benefits) each year. To fund this expenditure with 75% certainty would require a superannuation balance of approximately $130,000 invested in a balanced fund. This also includes the substantial contribution of the age pension (set at a maximum of $20,745 a year, the maximum basic rate for a single excluding supplements), which funds a major portion of retirement income.

This isn’t to say that $130,000 should be a goal. It shows that even small differences in savings can have a hugely positive impact on members’ actual retirement lifestyles. This is the basis for true engagement.

More detailed market segmentation also reveals the behaviour of retirees by wealth bands, age, singles versus couples, location, as well as showing their essential versus discretionary spending and how it changes through retirement.

Retirement and Expectations Spending Profiles

This type of quality data is crucial given most people will not seek personal financial advice. However, data is just one component of delivering a personalised retirement experience. A combination of data and analysis can provide a sophisticated profile that can ultimately underpin and deliver the right products to the right members at the right time.

Each member must ultimately define their own comfortable retirement but it’s only by understanding their reality that super funds can help them achieve it.

 

Wade Matterson is a Principal, Senior Consultant, and leader of Milliman’s Australian Financial Risk Management practice and a fellow of the Institute of Actuaries of Australia. Read more about the Milliman Retirement ESP here. This article is general advice only as it does not take into account the objectives, financial situation or needs of any particular person.

 

  •   7 September 2017
  • 1
  •      
  •   

RELATED ARTICLES

What financial risks do retirees face?

Falling home ownership: the elephant in the super retirement room

20k now or 50k later? What’s driving decisions to withdraw super?

banner

Most viewed in recent weeks

Noel Whittaker’s take on the budget

Marketed as a fix for inequality and housing affordability, the latest budget instead delivers a tangle of tax changes that leave everyday Australians worse off.

Australia has no death duties. Technically.

Australia may not levy formal death duties, but a growing web of tax measures is quietly shaping what wealth passes between generations. Now, the 2026 budget adds another layer.

Welcome to Firstlinks Edition 662 with weekend update

The debate over the budget is increasingly shaped by frustration and perceptions of unfairness, rather than clear-eyed assessment of policy outcomes.

How to minimise tax with a will

Inheritance tax implications in Australia may surprise some, as poor estate planning without proper wills or trusts can lead to costly tax bills and delays for beneficiaries.

How inflation is quietly moving the goalposts on retirement

Inflation doesn’t just raise today’s bills - it quietly increases the amount needed to retire, while simultaneously making it harder to save. Three steps to take before June 30th to improve retirement outcomes.

Back to the future - Why indexing CGT is a good idea

A return to indexation of capital gains would be a fairer way to compensate households for the effects of inflation than the current discount. Importantly, it opens the door to future, broader reforms to stop the taxation of inflation.

Latest Updates

Investment strategies

High quality businesses are on sale

Beneath the dominance of the ASX's largest stocks, much of the market has been left behind. High-quality companies are now trading at levels rarely seen, offering opportunities for investors willing to look deeper.

Investment strategies

The whirlwind is upon us

Something unusual is happening in markets. The winners are pulling further ahead at an extraordinary pace. As return dispersion hits extreme levels, volatility is rising and the investing landscape is becoming harder to navigate.

Strategy

Inequality destabilises economies

Extreme wealth concentration is no longer just a side effect of growth. As inequality deepens, its consequences are shifting from a social concern to a broader threat to economic stability and democratic resilience.

Investment strategies

Have AI’s four horsemen arrived?

AI exuberance is colliding with economic reality. Cracks are emerging as spending surges, ROI remains uncertain and enterprise behaviour shifts. The next phase may look less like an expansion and more like a reckoning.

Taxation

Budget tax changes only scratch the surface. Here are 4 reforms Australia needs next

The 2026 budget has reignited Australia’s tax reform debate, but more work remains. Beneath the surface lies a harder question: what structural reforms are needed to make the country's tax system fit for the future?

Taxation

Negative gearing: quarantined, not killed

The Budget's negative gearing changes defer deductions rather than deny them, yet a worked example shows quarantining can halve the tax benefit's present value for buyers of established dwellings.

Investment strategies

Family offices have quietly taken over Australian private capital

In just four years, Australia's private capital landscape has transformed. We are seeing changes across who deploys capital, how deals are structured and why new platforms and investor pathways are rapidly emerging.

Sponsors

Alliances

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.