The Association of Superannuation Funds of Australia (ASFA) calculates that a comfortable retirement will cost single Australians approximately $56,166 per year.

To fund that, the association assumes that a single retiree will need a superannuation balance of at least $630,000.

That’s the minimum amount you’ll need to have stashed away to be able to afford the retirement lifestyle you want.

But what if you didn’t live off your superannuation balance at all?

Instead of steadily drawing down on your superannuation capital to cover retirement lifestyle expenses, what if you could earn enough passive income to cover your living expenses?

This would let your superannuation balance keep compounding. Instead, you’d live solely off the income it generated.

It’s very possible.

Here’s how it could work.

How much superannuation do I need to generate $56,000 per year in passive income?

The calculation is relatively straightforward. You’ll need to divide your annual passive income by the overall dividend yield of your investment portfolio.

The tricky part is that the answer varies depending on what that dividend yield is.

Generally, as the dividend yield of your portfolio increases, the superannuation balance you need to earn the same passive income goes down.

It means, for example, that a portfolio yielding around 6% only needs to be half the size of one with a dividend yield of around 3% to generate the same level of passive income.

How much do I need if my portfolio yields, 4% to 6%?

If your overall portfolio has a dividend yield of 4%, you’ll need a superannuation balance of around $1.4 million. That’s because $56,000 ÷ 4% = $1.4 million.

If your portfolio yield is a little higher, at around 5%, your balance will need to be closer to $1.12 million to earn the same amount.

Raise that to 6% and you’ll need around $934,000 to earn $56,000 per year in passive income.

Remember that not every ASX share in your portfolio needs to yield the same amount. What matters is the overall dividend yield of your portfolio.

Ideally, you want to buy shares with various yields to hedge against volatility and protect your portfolio from fluctuating prices.

You don’t need to invest the whole sum in one go. Start with regular monthly investments and let compounding do some of the hard work for you.

What ASX shares pay a dividend yield between 4% and 6%?

Several options are available at this level, but here are my top picks.

Large blue-chip companies like BHP Group Ltd (ASX: BHP), National Australia Bank Ltd (ASX: NAB) and Woodside Energy Group Ltd (ASX: WDS) pay around the 4-6% level.

Elsewhere, defensive shares like Telstra Group Ltd (ASX: TLS), Origin Energy Ltd (ASX: ORG), AGL Energy Ltd (ASX: AGL), or Amcor PLC (ASX: AMC) are another solid choice for income-seeking investors. These picks could be particularly advantageous in the current environment, marked by rising inflation and heightened volatility.

The post How much superannuation do I need to earn $56,000 per year in passive income? appeared first on The Motley Fool Australia.

More reading

• If I invest $15,000 in Woodside shares, how much passive income will I receive in 2027?
• BHP vs Codan: Which ASX 200 share is the stronger buy today?
• How many Woodside shares do I need to buy for $1,000 per month of passive income?
• Fortescue vs National Australia Bank: Which ASX blue chip is the better buy this month?
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Samantha Menzies has positions in BHP Group. 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 positions in and has recommended Amcor Plc and Telstra Group. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

S&P/ASX 200 Index (ASX: XJO) tech shares led the 11 market sectors with an impressive 7.34% increase last week.

Meanwhile, the benchmark index edged 0.2% higher to close at 8,682.1 points on Friday.

ASX 200 tech shares were the surprise performer during a topsy-turvy week for the local bourse.

Tech shares are recovering from a 48% drop between 29 August 2025 and 30 March due to fears over artificial intelligence (AI).

Since then, the S&P/ASX 200 Information Technology Index (ASX: XIJ) has rallied 15% versus a 3% lift for the benchmark.

A changing of the guard helped push the tech sector higher amid turbulent trading on the ASX 200.

Communications and metals detection designer and manufacturer Codan Ltd (ASX: CDA) overtook logistics software provider WiseTech Global Ltd (ASX: WTC) as the sector’s largest company by market capitalisation after a trading update last week.

Meanwhile, the ASX 200 had its worst one-day fall in six months on Thursday amid concerns over rising interest rates and bond yields trading at close to multi-decade highs.

The Reserve Bank of Australia raised the official cash rate by 0.25% to 4.6% on Tuesday.

Meanwhile, the 10-year US Treasury bond yield was 5.24% and Australia’s was 5.33% on Friday.

Six of the 11 ASX 200 market sectors finished in the green last week.

Let’s review.

ASX 200 tech shares led the market sectors last week

Let’s take a look at how the biggest ASX 200 tech shares by market cap performed last week.

The Codan share price soared 29.09% to close at $67.45 on Friday after a trading update.

Codan’s market valuation is now $12.3 billion.

The WiseTech share price ascended 6.7% to close at $33.43 with a valuation of $10.5 billion.

TechnologyOne Ltd (ASX: TNE) shares rose 4.2% to $30.52 apiece.

The Xero Ltd (ASX: XRO) share price edged 0.85% higher to $57.85.

The Nextdc Ltd (ASX: NXT) share price fell 4.19% to $10.74.

Megaport Ltd (ASX: MP1) shares soared 13.86% to $22.34 on news of $1 billion in new AI infrastructure contracts.

The Life360 Inc (ASX: 360) share price rose 5.59% to $20.40.

The Dicker Data Ltd (ASX: DDR) share price lifted 2.67% to $15.40 apiece.

The Data#3 Ltd (ASX: DTL) share price soared 22.61% to $13.61 on the back of a trading update.

The Bravura Solutions Ltd (ASX: BVS) share price rose 0.96% to $3.15.

ASX 200 market sector snapshot

Here’s how the 11 market sectors stacked up last week, according to CommSec data.

Over the five trading days:

S&P/ASX 200 market sector	Change last week
Information Technology (ASX: XIJ)	7.34%
Consumer Discretionary (ASX: XDJ)	2.64%
Communication (ASX: XTJ)	1.81%
Utilities (ASX: XUJ)	0.64%
Industrials (ASX: XNJ)	0.47%
Financials (ASX: XFJ)	0.15%
A-REIT (ASX: XPJ)	(0.19%)
Consumer Staples (ASX: XSJ)	(0.2%)
Materials (ASX: XMJ)	(0.45%)
Energy (ASX: XEJ)	(1%)
Healthcare (ASX: XHJ)	(1.21%)

The post Tech shares shine while ASX 200 plunges to 4-month low appeared first on The Motley Fool Australia.

More reading

• BHP vs Codan: Which ASX 200 share is the stronger buy today?
• Top ASX shares to buy in October 2026
• 3 ASX 200 shares I would buy and hold for 10 years
• Zip vs Megaport: Which ASX tech share is the better buy?
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Bronwyn Allen 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 Bravura Solutions, Life360, Megaport, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Dicker Data, Life360, WiseTech Global, and Xero. The Motley Fool Australia has recommended Data#3. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Insurance Australia Group vs Coles Group shares: which is better for income investors?

Investors looking for reliable income from their ASX portfolios might have their eyes on Insurance Australia Group Ltd (ASX: IAG) and Coles Group Ltd (ASX: COL). Both are heavyweights in their respective sectors and regular dividend payers, but offer very different business models, dividend profiles, and outlooks. Here’s my take on how these two stack up for income-focused investors.

The case for Insurance Australia Group

Insurance Australia Group is the leading general insurer in Australia and New Zealand, underwriting a wide range of policies—including motor vehicle and home insurance—for individuals and businesses. With top brands under its umbrella and a sizeable presence across both countries, IAG is a go-to name for everyday insurance needs.

The key fundamentals from the latest snapshot are:

• Dividend yield of 4.02%, ahead of Coles
• A P/E ratio of 18.59, which is well below Coles’ figure
• Market cap of $18.57 billion, making it a substantial player but smaller than Coles
• Earnings per share shown as -0.901, which doesn’t line up with the positive P/E (more on that in a moment)

When it comes to dividends, IAG’s payout has fluctuated over recent years. IAG’s businesses have long underwritten substantial premium volumes, but recent dividends have come with lower franking levels—only 25% for the most recent payment. Franking levels have shifted over time, often below full 100% franking in recent years, which could impact after-tax returns for those relying on franking credits.

The case for Coles

Coles is one of Australia’s leading supermarket and retail operators, serving millions of Aussies with groceries, liquor, and everyday essentials through its national store network and growing digital footprint. Coles is seen as a defensive, staples-oriented business, benefiting from the ongoing need for food and essentials regardless of the economic cycle.

Highlight fundamentals for Coles include:

• Dividend yield of 3.35%, slightly lower than IAG’s but very consistent
• A notably higher P/E ratio of 28.71
• Market cap of $31.40 billion—substantially larger than IAG, reflecting its consumer-facing scale and lower perceived risk
• Strong reported earnings per share of 0.812
• Full 100% franking on its dividends, boosting the loyalty of income investors who value franking credits

Coles has a solid record of regular, fully franked dividends, with recent payments showing both frequency and predictability. According to its most recent public description, Coles offers a comprehensive store network and has continued to innovate with its online shopping and loyalty programs, helping underpin its resilient earnings and reliable payouts.

Valuation comparison

There are a few clear divergences between IAG and Coles in terms of valuation and dividend attractiveness. Here’s how they compare on core metrics:

Metric	Insurance Australia Group	Coles Group
Market Cap	$18.57 billion	$31.40 billion
P/E Ratio	18.59	28.71
Dividend Yield	4.02%	3.35%
Dividend per Share	$0.32	$0.74
Franking	25%	100%
Earnings per Share	-0.901	0.812

Note: IAG’s reported P/E ratio appears inconsistent with its negative EPS figure. This may be because the P/E is based on normalised or forecast earnings, rather than the statutory EPS shown above.

The main takeaway here for income investors is that IAG offers a higher dividend yield, but with lower franking and some inconsistency in earnings figures. Coles provides lower yield, but its dividends are fully franked and supported by positive reported earnings.

Recent share price performance

Comparing recent share price activity as of 30 September 2026:

• Insurance Australia Group: Closed at $7.94 as of 30 September 2026, slightly down -0.25% on the day. Its year-to-date (YTD) return is 3.8%.
• Coles Group: Closed at $23.36 as of 30 September 2026, up 0.21% on the day. Its YTD return stands at 12.4%.

Coles has outperformed IAG in recent months, delivering a much higher YTD return for shareholders.

Which is the better buy?

For income investors—with one eye on yield and the other on dividend predictability—my pick would be Coles Group over Insurance Australia Group.

Coles delivers fully franked dividends, which can boost after-tax returns for many Aussies, especially those investing via super funds or directly. While IAG’s yield is a touch higher on headline numbers, its payouts carry much lower franking, reducing their appeal for income seekers chasing franked income. There’s also some concern on the consistency front: IAG’s negative EPS versus a stated positive P/E ratio makes me pause, as it might flag earnings volatility or reliance on one-off adjustments.

Coles’ more expensive P/E might make value hunters wary, but as an income investor, I think the reliability, fully franked dividends, and solid recent performance tip the scales. You may give up a fraction of yield, but in exchange you get consistency, reliability, and maximum franking credits. That’s why, if I had to pick just one for an income-focused portfolio, my vote would go to Coles Group.

The post Insurance Australia Group vs Coles: Which ASX dividend comes out on top? appeared first on The Motley Fool Australia.

More reading

• Why I’d buy CBA and Coles shares in October
• BHP vs Coles: Which ASX share is better for passive income?
• How much is needed in superannuation to target a $10,000 monthly passive income?
• Here are the top 10 ASX 200 shares today
• Investors get defensive as ASX 200 drifts to a 15-week low

Motley Fool contributor Laura Stewart 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.