This is the big question facing all of us thinking about retirement. How much will I need to put aside during my working life to cover my needs for the 20 or more years I will have in retirement?

The answer, of course, is complicated. To a great extent it depends on your expectations and circumstances; whether you own your own home and what level of lifestyle you aspire to are important issues to consider.

Around 75 per cent of couples will enjoy a comfortable retirement, according to figures from the Commonwealth Bank’s 2017 Retire Ready Index, but the forecast is not so rosy for singles.

The CommBank report found that, across the board, 7.7 million people (52 per cent) aged between 25 and 64 can expect a comfortable retirement. That leaves 5.1 million (47 per cent) Australians unlikely to have enough put aside for their later years.

If you’re single, the news is even worse. Only 22 per cent of single women can expect a comfortable retirement and 31 per cent of single men the same.

The report, produced by CBA and super consultancy Rice Warner, uses the Association of Superannuation Funds of Australia’s definition of a comfortable retirement as an annual income of $59,619 for a couple and $43,372 for single home owners, to set its benchmarks.

The survey highlights the central role the age pension plays in the future retirements of Australians. Only 20 per cent of couples could afford a comfortable retirement without the pension along with 17 per cent of single males and 9 per cent of single women.

The news, however, is not all bad for those who don’t quite make the grade. The report observes that “44 per cent of singles and 94 per cent of couples are almost retire ready and projected to have between 80–90 per cent of what is required for a comfortable retirement”.

Let’s take a look at some of the detail of retirement life requirements based on ASFA lifestyle standards. Both the following budgets assume that the retirees own their own home outright and are relatively healthy. If you have a mortgage or are renting you will need more.

Source: ASFA

What is the breakdown of retirement costs?

ASFA has done some interesting work on what the breakdown of life in retirement costs. Here is a chart to give you an indication. The following tables apply to singles and couples living in Victoria.

The single category is based on the costs for a woman, which ASFA estimates as being 0.7 per cent more than for a man, with a modest lifestyle and 5.7 per cent more with a comfortable lifestyle. Differences include health, clothing and household goods and services.

What balance will I need to achieve that?

There’s a couple of different ways of looking at that question. If you simply assume that you are going to live off the returns from your fund and hand it on to your children when you die and receive a return of 5 per cent, then you get the following:

A couple with modest lifestyle options would need about $684,000 to retire on, while a couple wanting a comfortable lifestyle would need $1.18 million.

A single calculating a 5 per cent return on a fund would need $479,000 for a modest life and $867,000 for a comfortable life. All these figures assume a retirement of around 20 years.

Of course, that’s not how most people fund their retirements. The usual method is to rely on super savings supplemented for all or part of your retirement years by the age pension. ASFA says using this model of retirement a comfortable lifestyle for a couple would demand savings of $640,000 and $545,000 for a single person.

A modest lifestyle demands a far lower retirement balance. For a couple it is $50,000 and for a single it is $35,000. Obviously both the modest lifestyle options would rely heavily on the Age Pension.

This is an excerpt from Your Super Made Simple by Rod Myer, published by Wilkinson Publishing and now available online and at book stores.