Years of relentless cost-of-living increases have upended decades of retirement planning for Australian workers, pushing the expected retirement age four years higher and driving the projected superannuation savings needed for a comfortable post-work life across the $1 million threshold for the first time, new industry research shows.
In Colonial First State’s (CFS) 2024 Retirement Report, researchers found that while Australian workers still hold an ideal retirement age of 62, shifting financial realities have forced most to adjust their expectations: the average worker now anticipates they will need to remain in the workforce until age 66. The report, based on a broad survey of working Australians, paints a clear picture of widespread anxiety over retirement security amid persistent inflation.
More than half of all respondents reported worry that they will not accumulate enough savings to fund a comfortable retirement, with half specifically citing fears of unplanned out-of-pocket health or aged care expenses. A further 37% shared concerns that they will outlive their superannuation savings entirely. Against this backdrop, the average amount workers now say they need in super for a comfortable retirement has jumped by $183,000 year-over-year, pushing the total target above $1 million for the first time since CFS began tracking the metric.
Marissa Powe, CFS executive director for retirement and growth, framed the shift as a direct response to sustained cost increases that have eroded household savings and projected retirement balances. “Australians are understanding that cost-of-living continues to increase, there’s the cost of aged care and healthcare,” Powe told NewsWire. “They are just taking that all in knowing their retirement savings and super will need to go further than it ever has before.”
The new research comes as official inflation data shows mixed signals for Australia’s economy. The Australian Bureau of Statistics recently reported that annual headline inflation eased to 4.2% in April, down from 4.6% in March, thanks to temporary federal government measures including a halving of the fuel excise and GST rebates that have softened near-term price pressures. However, core trimmed mean inflation — the metric closely monitored by the Reserve Bank of Australia that strips out volatile price shifts — rose to 3.4% for the 12 months to April, indicating underlying inflationary pressures remain entrenched in the economy.
The CFS report also highlighted a major gap in retirement preparedness tied to access to professional financial advice. More than 75% of workers who have engaged a financial adviser reported feeling prepared for retirement, compared to fewer than 50% of workers who have never accessed professional advice. CFS Superannuation chief executive Kelly Power argued that expanding access to affordable advice is critical to closing this preparedness gap. “Planning for retirement is complex, but the path forward becomes much clearer with the right support in place,” Power said. “That’s why improving access to financial advice is critical. We strongly believe that reducing barriers to advice, like cost, will help more Australians get the support they need to plan and retire with confidence.”
There is no consensus among industry bodies on how much super Australians actually need to retire comfortably, with estimates varying based on factors including home ownership, access to the age pension, and individual spending habits. The Association of Superannuation Funds of Australia (ASFA) confirms that persistent cost pressures have made a comfortable retirement harder to achieve for all cohorts. ASFA estimates that a single 67-year-old homeowner now needs a $630,000 lump sum to retire comfortably, while a retired couple needs a minimum of $730,000, up from $690,000 previously. Even for Australians seeking a more modest retirement, required lump sums have risen to $110,000 for singles and $120,000 for couples, up from $100,000 for both groups. All ASFA estimates assume the retiree owns their home outright, a key caveat that excludes a growing share of younger Australian workers.
By contrast, Super Consumers Australia (SCA) notes that survey data from current retirees shows most end up spending less than expert industry estimates suggest. SCA calculates that a typical single retiree only needs $322,000 in super to support $44,000 in annual post-work spending, while a couple needs a combined $432,000 to fund $64,000 in annual retirement expenses.
The report also confirmed that retirement anxiety disproportionately impacts women, with the gender gap in preparedness showing little sign of closing despite years of awareness efforts. Nearly two-thirds of women (62%) reported worry about having insufficient retirement savings, compared to just 48% of men. Women are also more likely to fear unexpected health and aged care costs (41% versus 34% of men) and to worry about outliving their super savings. While both genders have seen modest gains in self-reported preparedness over the past three years of CFS surveys — with women’s preparedness rising from 29% to 43% and men’s from 44% to 59% — the gap between the two groups has remained largely unchanged.