Retirement starts to loom large for most people when they turn 50. Then there's the "oh my god" moment; the realisation that they need to save much more if they are to enjoy a comfortable retirement.

The Australian Securities and Investments Commission has started to clear the way for superannuation funds to provide members with regular estimates of their likely balance upon retirement.

For a "comfortable" retirement, the Westpac-ASFA Retirement Standard says an annual income of just over $50,000 is needed. But how much capital is needed to support that?

A recently retired engineer took me to task for a story published in Money on October 14 headed "Don't leave it too late", in which I said at least $500,000 was needed for a home-owning couple who intended to retire at age 65 and fund 20 years of retirement at $50,000 a year. That sum assumed the retirees had no other assets and the house would be the extent of the children's inheritance.

But the retired engineer said the lump sum needed was more like $700,000. He made the (reasonable) assumptions of a 7 per cent return and inflation of 3 per cent. However, he neglected to allow for the age pension. During the 20-year retirement period, our retirees would run down their capital and would be able to pick up more of the age pension.

I asked financial planner Greg Cook, of Eureka Financial Group, for his opinion. He said about $550,000 was needed and that was taking into account the fact the couple would receive a combined part-age pension, which would rise as the capital ran down.

The capital required was less than the engineer's estimate because the lump sum had to fund the retirement income required, less the income from the part-age pension.

The Australian Securities and Investments Commission's FIDO retirement planner, which is the best calculator available publicly, provides the same answer at fido.gov.au.

Cook says he would advise people to save more than this because retirees do not want to leave themselves too dependent on the age pension and at the whim of changes to social security.

Higher-income earners are likely to have higher expectations of their retirement. Most planners say retirement income should be at least 60 per cent of pre-retirement income.

Larger lump sums can be invested more conservatively, with less exposure to market downturns. To generate the same retirement income, smaller lump sums have to be invested more aggressively.

Cook points out that usually at least one member of a couple comes into an inheritance. And the couple could eventually move to a smaller, cheaper house, which they may want to do anyway if the upkeep becomes too much for them.

There are further considerations, too. Firstly, the "comfortable" $50,000-a-year retirement, as defined by Westpac-ASFA, would strike many readers as being fairly basic. It includes private health insurance, a reasonable car, domestic holidays and an overseas trip every five years. There's not much in the budget for cultural activities outside visits to the cinema, extended overseas travel or for helping the children out financially. Anyone who can't work to the age of 65, for whatever reason, would want to save more.

Then there's the risk of outliving retirement savings. Retirees with higher socio-economic status generally live longer than average. Nick Callil of superannuation consultant Watson Wyatt estimated recently there was a 50 per cent chance that one of a pair of 65-year-old self-funded retirees would live to 90. Longevity improvements mean not only living longer but also in better health, meaning the length of active retirement will be extended.

Many assumptions have to be made in arriving at a figure for retirement and people's individual circumstances differ.

For a really comfortable retirement, the figure to aim for is probably closer to $700,000 for most people on middling or a bit better than middling incomes. To achieve a lump sum of that size, the 9 per cent compulsory super will not be enough; salary sacrificing into super should begin earlier rather than later.