How much pension do you need for retirement and the lifestyle Barefoot Investor will buy

Australians can retire for far less than the retirement industry recommends – if they are prepared to forgo the flashy new car and regular holidays abroad.

Financial advice writer Scott Pape, better known as Barefoot Investor, has suggested $250,000 is enough for retirement.

That’s less than half the $535,000 that the Australian Pension Fund Association (ASFA) recommends for someone receiving a 67-year-old pension from July 2023.

Pape recently endorsed a recommendation from Super Consumers Australia, who believe that $258,000 is enough for someone who has paid off their mortgage.

Financial advisory writer Scott Pape, better known as Barefoot Investor, has suggested $250,000 is enough to retire at

Director Xavier O’Halloran said the figure, based on a living of $38,000 per year, was designed to reflect someone who maintains an existing standard of living.

Super-saving recommendations for homeowners

SUPER AUSTRALIAN CONSUMERS: $258,000 savings on individual live from $38,000 a year for a ‘medium’ lifestyle

They recommend saving $73,000 for a ‘low’ lifestyle of $29,000 a year

The ‘high’ luxury lifestyle costs $743,000 in savings, costing $51,000 a year

For couplethe ‘medium’ recommendation is $352,000 to live off of $56,000 a year

The ‘low’ savings target is $95,000 to live on $42,000 a year

‘High category’ is $1.021 million to live from $75,000 a year

“You might consider not buying a new car that flashes out of the parking lot,” he told Daily Mail Australia.

‘If that’s what you did before, it really reflects how you maintain that standard of living.’

This recommendation is also based on vacationing in Australia each year rather than going overseas.

“It really reflects what people are spending today,” O’Halloran said.

But O’Halloran, whose group works with consumer organization CHOICE, says Australians who are still renting at retirement age need to have more savings.

A frugal individual who has paid off their house needs to have $73,000 saved up to survive on $29,000 a year.

However, a tenant will need to have $140,000 in retirement savings to cope with an unexpected increase in living costs.

‘For tenants, they face much higher levels of financial hardship and income poverty,’ says Mr O’Halloran.

‘The overall message is that if you’re not a homeowner in retirement right now, your chances of facing financial stress are much higher.

‘We are all concerned about the decline in home ownership rates and how it will continue as it has for the younger generation, as more people enter retirement.’

Director Xavier O’Halloran says their retirement savings recommendation, based on living of $38,000 per year, is designed to reflect someone who maintains their existing standard of living. ‘You might look not to buy the flashiest new car from the parking lot’ (pictured is the latest Land Rover Defender)

How many supers should you have by age?

25: $31,000

30: $68,000

35: $112,000

40: $164,000

45: $219,000

50: $285,000

55: $360,000

60: $449,000

65: $535,000

Source: Australian Pension Fund Association by age in 2020

Pape said the ASFA’s recommendation of $535,000 for those receiving a pension at age 67 – or $545,000 for those retiring a little earlier – was unrealistic.

It is based on an individual who needs $46,494 a year to live.

‘The super industry has been playing for too long for millionaires in the members’ stand,’ says Pape.

For couples, the ASFA recommends a total of $640,000 to live off of $65,445 a year.

In comparison, Super Consumers Australia’s medium recommendation for a couple is $352,000, to live off of $56,000 a year.

Mr O’Halloran said the financial advisers he spoke to were concerned about the super-savings goal being unattainable.

“Presenting people unrealistic targets – telling them they have to double their super overnight as they head towards retirement – is not going to help,” he said.

Nonetheless, Super Consumers Australia recommends $743,000 for individuals who wish to enjoy a more luxurious lifestyle at a cost of $51,000 per year, who will pay for an annual vacation abroad.

For a couple in the ‘high’ spending category, it is $1.021 million to live on $75,000 a year.

‘For that category, I would expect normally they would take a regular vacation, they might travel overseas,’ Mr O’Halloran said.

“If they can afford to do that with that salary before retirement, they can expect to do it until retirement.”

Nonetheless, Super Consumers Australia recommends $743,000 for individuals who wish to live a more luxurious lifestyle at a cost of $51,000 per year, who will pay for an annual vacation abroad (pictured is a tourist photographing the Statue of Liberty in New York)

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