Most Australians check their superannuation and focus on one thing: the balance.

That makes sense because it is the number staring back at you from the app or annual statement. It feels like the scoreboard. Higher is better, lower is worse, and anything below the average can feel like bad news.

But the uncomfortable truth is that your super balance is not the only number that matters in retirement planning. In many cases, it may not even be the most useful one.

The number that matters more is how much income that balance can realistically support.

A big superannuation balance can still feel small

It is easy to assume that reaching a large super balance will automatically make retirement feel comfortable, but that is not always the case.

A person with $500,000 in superannuation and high spending needs may feel far more financially stretched than someone with $350,000, a paid-off home, low expenses, and a modest lifestyle.

That is why retirement planning should not begin with the question: “How much do I have?” It should begin with a more practical question: “How much will I need each year?”

Once you know that, your super balance starts to make far more sense.

Retirement is a cash flow problem

During your working life, income usually arrives through wages or a salary. In retirement, that income has to come from somewhere else. It may come from super drawdowns, investment income, the Age Pension, savings, or a combination of all of them.

That means your superannuation is not just a nest egg. It is a future pay packet, and like any pay packet, what is important is whether it can cover the life you want to live.

According to the Association of Superannuation Funds of Australia, a comfortable retirement requires around $630,000 in super for a single person and $730,000 for a couple, assuming home ownership and some Age Pension support.

Those numbers are useful, but they are only estimates of the capital needed to support a particular lifestyle.

Comfortable means choices

A comfortable retirement is not extravagant. It is not about luxury travel every month or spending without limits. Instead, it is about choice.

It means having the flexibility to eat out, run a reliable car, maintain private health insurance, replace household items when needed, visit family, and take occasional holidays without every decision feeling financially loaded.

By contrast, a modest retirement can still be workable, but it usually involves more compromise. The bills may be paid, but there is less room for mistakes, surprises, or indulgences.

This is why income is so important. It determines whether retirement feels flexible or fragile.

What to do instead

A better way to assess your superannuation is to work backwards.

Start by estimating the annual income you would like in retirement. Then consider how much of that could come from the Age Pension, if you are eligible. From there, your super only needs to fill the gap.

This approach can be far less intimidating than chasing a giant headline number.

It also makes the task more practical. If the gap is too large, you can respond by increasing contributions, reviewing investment options, reducing fees, delaying retirement, or adjusting expectations.

Foolish takeaway

Your superannuation balance is important, but it is not the whole story.

The real question is not whether your balance looks impressive on paper. It is whether it can help generate the income you need for the retirement you want.

In retirement, wealth is not just measured by what you have saved. It is measured by how comfortably that money lets you live.

The post The Australian superannuation number that is more important than your balance appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

12 months ago, Xero Ltd (ASX: XRO) shares were flying high, reaching a record high of $196.52. Fast forward a year, and the picture looks dramatically different.

At the time of writing, the accounting software company’s shares change hands for around $65.00, a 7-year low. That leaves the stock down more than 40% since the start of 2026 and roughly 66% lower than this time last year.

It’s been a brutal period for shareholders.

So what on earth is happening with this former ASX tech darling?

Why are Xero shares under pressure?

The latest weakness appears to be part of the broader sell-off that has swept through growth stocks.

Investors have become far less willing to pay premium valuations for technology companies, particularly those whose investment appeal depends heavily on future growth. As sentiment towards the sector has deteriorated, Xero shares have come under fire.

The market simply isn’t valuing software businesses the way it did during the boom years.

That doesn’t necessarily mean there’s anything fundamentally wrong with the company.

Business is still performing

While the price of Xero shares has collapsed, Xero’s operating performance tells a very different story.

Revenue surged 31% to NZ$2.75 billion in the most recent financial year, highlighting continued strong demand for its accounting software platform.

Adjusted EBITDA increased 18% to NZ$757.4 million, while free cash flow reached NZ$554 million.

Perhaps most importantly, annualised recurring revenue jumped 37%.

That’s a key metric for software companies because recurring subscription income provides visibility and predictability. Investors typically place a high value on businesses that can generate growing streams of recurring revenue.

In other words, the business continues to grow even as the share price struggles.

US opportunity remains enormous

One reason some investors remain optimistic about Xero shares is the company’s growing traction in the US.

For years, the US small-business market has been viewed as the company’s biggest long-term opportunity. Success there could significantly expand Xero’s addressable market and growth runway.

Encouragingly, organic growth in the US reportedly accelerated to 30%.

That’s an important milestone. If Xero can establish itself as a meaningful player in the world’s largest accounting software market, the long-term growth potential becomes far more compelling.

Management’s outlook also suggests growth remains firmly on the agenda. The company is targeting roughly 34% revenue growth in FY27 and expects adjusted EBITDA to land between NZ$860 million and NZ$920 million.

Those numbers hardly describe a business running out of steam.

What next for Xero shares?

Despite the strong operating performance, risks remain.

Investors are still waiting to see how the company’s Melio acquisition progresses, while broader market sentiment towards software stocks remains fragile.

That’s helping explain why Xero shares continue to trade well below previous highs.

Even so, some analysts see value emerging. Shaw and Partners believes the stock offers approximately 25% upside from current levels.

For now, the market appears torn between two competing narratives: a rapidly growing software business and a growth stock sector that remains deeply out of favour. Which story wins may determine where Xero shares head next.

The post What’s spooking investors about Xero shares? appeared first on The Motley Fool Australia.

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• Down but not out: 3 ASX tech shares ripe for a rebound

Motley Fool contributor Marc Van Dinther has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Some of the ASX 200’s highest-quality shares have been hit hard over the past 12 months.

While this is disappointing, for investors with a long-term mindset, large falls in strong businesses can create buying opportunities.

This is especially true when the market becomes focused on short-term concerns while the company’s long-term position remains attractive.

Here are three ASX 200 shares that are down heavily and could be bargain buys for patient investors.

Cochlear Ltd (ASX: COH)

Cochlear has been one of the biggest underperforming shares in the ASX 200 over the past 12 months.

Its shares are down approximately 62% over this period, leaving the hearing implant company well out of favour with investors.

That is a major move for a business with a long record of innovation, global leadership, and life-changing products.

Cochlear’s devices help people with significant hearing loss reconnect with speech, sound, and daily communication. That gives the company a role that goes well beyond consumer electronics or discretionary healthcare.

The business operates in a specialised market where clinical trust, product reliability, surgeon relationships, and long-term patient support all matter.

Those advantages take years to build.

The recent share price weakness reflects disappointment over its recent performance. However, the long-term need for hearing solutions should continue to grow as populations age and access to treatment improves.

If Cochlear can restore confidence in its earnings trajectory, the selloff could prove to be a major opportunity for buy and hold investors.

REA Group Ltd (ASX: REA)

REA has also been sold down heavily.

Its shares are down approximately 40% over the past 12 months amid concerns about higher interest rates and proposed changes to negative gearing.

These issues have weighed on investor sentiment because REA is closely connected to the housing market. If property activity slows, listing volumes and advertising demand can come under pressure.

But the long-term investment case remains compelling.

REA owns realestate.com.au, one of Australia’s most important property platforms. Buyers go there because the listings are there, agents list there because the audience is there, and vendors want access to the largest possible pool of potential buyers.

That loop gives REA a powerful position in the property ecosystem.

Housing markets move through cycles, and policy changes can affect confidence. But Australians remain deeply engaged with property, and digital marketplaces continue to play a central role in how homes are bought and sold.

A 40% fall may have created an opportunity to buy one of the ASX’s best digital businesses at a far more attractive price.

Xero Ltd (ASX: XRO)

Xero has suffered the sharpest fall of the three ASX 200 shares.

The cloud accounting software company’s shares are down approximately 65% over the past 12 months.

The broader tech selloff has hurt sentiment, and investors have also been weighing concerns about artificial intelligence disruption across software markets.

That has created a difficult backdrop for Xero.

However, the company remains deeply embedded in the financial workflows of small businesses, accountants, and bookkeepers.

Its platform helps users manage invoicing, payroll, bank feeds, reporting, compliance, payments, and adviser relationships. Once a business has built its financial processes around Xero, switching can become inconvenient and disruptive.

Artificial intelligence may also become a useful tool inside the platform over time, helping automate tasks and improve the value customers receive.

The share price fall shows how much expectations have reset. But if Xero keeps expanding internationally, adds more services, and uses technology to deepen its platform, the current weakness could prove to be an attractive entry point into one of the ASX’s strongest software businesses.

The post These ASX 200 shares are down 40% to 65% and could be bargain buys appeared first on The Motley Fool Australia.

More reading

• 5 ASX growth shares I want in my portfolio in FY27
• What’s spooking investors about Xero shares?
• What on earth’s going on with Cochlear shares?
• Xero shares just crashed to COVID-era lows. Is this ASX 200 tech stock broken?
• Buy, hold, sell: Charter Hall, Northern Star, Cochlear shares

Motley Fool contributor James Mickleboro has positions in Cochlear, REA Group, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Cochlear and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Cochlear. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.