How much should Australians be saving?

Every year the reports come out and freak us out. Many experts agree these days we need to save over $1 million over our lifetimes if we want to retire and live “comfortably”.

But what does that actually mean if you’re 30 or 40 or 50? And what about for right now?

Unfortunately, like everything in finance, to get a very specific answer for your individual circumstances you would need to go ask an expert yourself.

If you’re with an industry super fund, many have free financial advisers on hand to make sure at least your super is on the right track.

So let’s have a look at how much you might want to have in the bank by:


If you want to get ahead, by 30-years-old US firm Fidelity recommends having the equivalent of your annual salary saved for retirement.

Other more conservative estimates say to shoot for half your annual salary – but keep in mind that you’ll need to make up the difference later in life.


At halfway to retirement, Fidelity recommends having three times your annual salary in your super!


As you get closer to the end of your working life, experts recommend you have six times your annual salary put away.

But that’s for the future. What about right now?

With low interest rates and high debt levels, Australians are not saving as much as they used to. According to the ABS, Australia’s household savings ratio — the percentage of net savings on net income — is now at levels not seen since the GFC, decreasing to 2.7 per cent in the last quarter of 2017.

To contrast that, between 1959 and 2017 we saved an average of almost 10 per cent with a high of 20.6 per cent in 1973.

Concerningly, many of us don’t even have savings on hand for a rainy day. Comparison site Mozo put emergency savings a different way in their guide to having a F** off fund.

“A f**k off fund should cover three months of rent, utilities, food and transport as well as small realistic costs that might crop up such as a few inexpensive restaurant meals, clothing, and entertainment, should you need to spend money on it,” Mozo director Kirsty Lamont said.

Here’s their view by city:


But how do you actually do it? Here’s some quick tips on how to start saving:

Get rid of your debt: Consolidate credit cards and pay off personal loans as fast as possible (check out our debt consolidation loans here, we don’t charge for early repayments!)

Find 1%: Increase your savings by 1 per cent every year, and if your income increases increase it by more!

Use a circuit breaker: Australian money expert Lacey Filipich recommends putting a circuit breaker in place to stop “frivolous purchases”.

“I like to make a rule that I don’t buy anything I hadn’t planned to buy on the spot if it’s over a certain $ amount. So, if I see something and think ‘I want/need that!’, I make myself wait at least a day, sometimes a week, before I buy it. Nine times out of 10, I don’t go back to buy it and I don’t miss it.”

Read more of her story in our feature on Aussies who have retired before they hit 40!