If you thought you would be living in luxury with a million-dollar retirement nest egg, think again.

A superannuation expert has calculated that in the current low interest rate environment, $1 million would only buy an income stream the equivalent of the age pension.

Jeremy Cooper, the chairman of retirement income at investment firm Challenger, says a million dollars is always seen as a nice round figure in debates such as the present one surrounding super tax concessions.

But using the current 10-year bond rate of 2.3 per cent as the basis of the analysis he found that $1 million would give you a little less that $1300 a fortnight, the same as the government pension.

“It was really just to demonstrate … how much it would cost hypothetically to buy an age pension for the rest of your life,” he told ABC Radio on Monday.

If the bond rate was back to a pre-2013, 20-year average of six per cent it would bring that million dollar figure down to half a million dollars, a level he says people would be more comfortable with.

In separate analysis, the Grattan Institute has found little evidence that super funds charging high fees perform well enough to justify the extra costs.

In a follow up to its “Super Sting” report released in 2014 – which found Australians pay about $21 billion in super fees each year – the think tank says Australians are paying $4 billion a year above what is being charged by leaner operating funds.

“There are too many accounts, too many funds, and too many of them incur high administrative costs,” the author of the new report Jim Minifie says.

He said reform is needed to address a fundamental threat to the adequacy of retirement incomes, such as the Murray financial system inquiry recommendation that policy makers do more to prune out poor products.

“They will reduce pressure on the age pension and the taxpayers dollar,” he says.

– AAP