Your Critical Five-Year Window
Are You on Track for a Comfortable Retirement?
Australians at age 62 are just five years away from being able to tap into their superannuation, along with potential access to the Age Pension. With the rising cost of living and industry benchmarks for a comfortable retirement topping over $75,000 a year for couples, this is a critical time for many to assess their financial readiness.
The retirement planning industry reports that the average super balance for those retiring at 67 falls well short of the amount needed to fully fund a comfortable retirement without other sources of income. At 62, your balance should ideally be ahead of these national averages if you wish to avoid relying heavily on government support.
Comfortable vs. Modest Retirements
Not all retirement lifestyles are equal. Some Australians enter their 60s with the financial freedom to travel, eat out, and enjoy leisure activities, while others must carefully budget for bills and unexpected costs.
Industry standards outline the difference:
A comfortable lifestyle requires careful planning and typically means having private health insurance, a budget for fitness and leisure, local and occasional overseas travel, dining out, and the flexibility to replace or upgrade household items.
A modest lifestyle covers the basics—food, energy, transport, and limited leisure—but offers very little room for holidays or major, unexpected expenses.
It is crucial to note that these benchmarks often assume you own your home outright. If you are renting, annual retirement costs spike by more than 30%.
Costs Rising Faster Than Inflation
A major challenge for retirees is that the cost of maintaining a retirement lifestyle often climbs quicker than general inflation. Key cost drivers that retirees face include:
Health: Couples aiming for comfort spend a significant amount annually on cover and medical costs.
Utilities: Power bills have seen continuous increases in recent quarters.
Food: Groceries alone constitute a substantial portion of annual spending for a retired couple.
Technology: Retirees must budget for broadband, mobile plans, and streaming services to stay connected in the modern world.
Do You Have Enough Set Aside?
Industry savings benchmarks provide a useful guide for homeowners as a lump sum needed to support different lifestyles:
Comfortable Couple: $690,000
Comfortable Single: $595,000
Modest Couple (Homeowners): $100,000
Modest Single (Homeowners): $100,000
For Australians at age 62, comparing your current super balance against these figures highlights the critical five-year window remaining to close any gap.
Five Years to Act: Practical Strategies
The good news is that there is still time to strengthen your position. Here are three practical, non-speculative strategies.
Boost Concessional Contributions: Utilizing salary sacrifice or making deductible contributions can accelerate your balance growth. If your super is below a certain threshold (currently $500,000), the carry-forward rule allows you to use unused contribution caps from the past five years.
Invest in a Blend of Growth and Income Assets: It is not all about preservation. Investing in quality ASX shares and low-cost ETFs can help your balance outpace inflation, while robust income-paying stocks can provide reliable distributions once you retire.
Think Beyond Super: Exploring alternative income streams, such as rental income, transitioning to part-time work, or maximizing passive investments held outside of super, can reduce reliance on your nest egg and provide greater financial flexibility.
Conclusion: Making Every Dollar Work Harder
At 62, the financial focus shifts from building wealth from scratch to making every existing dollar work harder for you. Knowing your current balance, understanding the lifestyle you want to achieve, and taking proactive steps in these final five years before accessing your retirement funds can make all the difference. With smart contributions, sensible growth exposure, and diversified income streams, you can turn uncertainty into confidence and step into retirement prepared.
Source: https://www.fool.com.au/2025/09/15/will-the-average-superannuation-at-62-be-enough-for-retirement/
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