Industry benchmarks suggest that for homeowners aged 65 and over, a comfortable retirement lifestyle currently requires around $76,000 per year for a couple and about $54,000 per year for a single person. These figures assume you own your home outright, maintain private health insurance, and enjoy discretionary spending such as dining out, travel and leisure activities.
If you rent in retirement, the income required is significantly higher. Housing is often the single biggest variable in retirement planning.
However, these are only benchmarks. Your definition of comfortable may include frequent overseas travel, helping children financially, or maintaining investment properties. Others may be perfectly content living more modestly.
Turning Income Into Capital Required
Once you know the income you want, the next step is determining how much capital is required to support it.
Some people use rough rules of thumb such as withdrawing 4–5% per year. While that can provide a basic illustration, it is not a guaranteed or universal rule. Sustainable withdrawal rates depend on:
- Investment returns
- Inflation
- Fees
- Market volatility
- How flexible your spending is
For example, a couple wanting $70,000 per year from their own savings might require well over $1 million invested, depending on how conservative or growth-oriented their portfolio is and whether they intend to preserve capital or gradually draw it down.
Retirement modelling must test not only average outcomes but also poor early market returns. That’s where proper planning becomes critical.
The Role of the Age Pension
For many Australians, retirement income does not come solely from super. The Age Pension can form part of the mix.
Once you reach Age Pension age, your super is generally assessed under both the assets test and the income test. The way your super is structured — whether in accumulation or pension phase — can influence how it is assessed.
This means that in some circumstances, structuring decisions can affect total retirement income, not just investment returns.
It is not always a simple case of “more super is better.” The interaction between private capital and government benefits must be considered.
Why the Number Is Personal
Two retirees with identical balances can have completely different outcomes.
One may retire at 60, spend heavily in the first decade and leave little behind. Another may retire at 67, spend conservatively and maintain capital for decades.
Health, lifestyle goals, family priorities and risk tolerance all influence what “enough” looks like.
The better question is not “How much super do I need?” but:
“What level of income do I want, and how confident do I want to be that it will last?”
A comfortable retirement is not determined by a headline number. It is determined by aligning your capital with your desired lifestyle and structuring it intelligently.
Disclaimer: This information is general in nature and does not consider your personal objectives, financial situation or needs. You should consider seeking professional advice before making any financial decisions. Past performance is not a reliable indicator of future performance.
