(Source: AFR)
Investing surplus cash into superannuation, borrowing to invest and paying off the family home are the top strategies from advisers on how to hit the magic $1 million savings target for retirement.

But as to whether $1 million is enough depends on life expectancy and whether you are planning on a champagne or rainwater lifestyle.

"There is no 'average' when it comes to living expectation," says Stuart Wemyss, a director of ProSolution Private Clients, a financial advisory group. "$50,000 a year might be enough for some people whereas others will need $150,000 a year. For most people, it's going to be somewhere in that range."

The debate about the $1 million target for super savings was sparked by the former head of the federal government's super review, Jeremy Cooper, warning $1 million "won't necessarily guarantee a comfortable retirement". Many argue that $1 million is still the magic figure – each. So rather than a couple relying on $1 million, many advisers say $2 million is more realistic.

But for the "average" super saver, getting anywhere near the $1 million target will be a prodigious feat of savings, investment and risk-taking over coming decades, according to government statistics.

For example, according to recent figures the average balance at the time of retirement was about $197,000 and only $105,000 for women, which means recent retirees will need to rely on the age pension in their retirement.

The average Australian 40-year-old male can expect to live for another 40 years, according to life expectancy tables.

ENORMOUS CHANGES

The magnitude of change that can happen during that period is reflected by looking back 40 years when the average house price in Sydney was $34,000, Gough Whitlam was prime minister and the Australian Securities Exchange was trading under 300 points.

The average house price in Sydney is now more than $600,000 and the stock market is touching 6000.

John Woodley, chief executive of Fitzpatricks Private Wealth, warns that for older investors, say in their 50s, it could mean increasing risk when this should be reduced because of the difficulty in recovering lost ground if there is another market crash, such as the global financial crisis.

Woodley encourages a lifestyle review involving reduced discretionary spending, pushing back retirement, partial retirement or reallocating assets, such as downsizing.

David Bryant, head of investments for Australian Unity, says the traditional strategy involving real estate, bank shares and term deposits that has worked "so well for so long" is approaching its end.

"Investors need to consider introducing other options such as unlisted commercial property and investing offshore. Get prepared now for where you will end up. Get familiar with how and what to invest in, and increase your exposure over time," he adds.

Claire Mackay, a financial planner and accountant with Quantum Financial, recommends topping up super with regular salary-sacrifice and personal contributions for any free cash.

For example, a 55-year-old can make an annual maximum contribution – 9.5 per cent superannuation guarantee and salary sacrificing – of $35,000.