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How much income will I need?

There are many opinions about what is a reasonable and achievable level of retirement income. Essentially, this is an area where individual circumstances and expectations play a big part.

Unfortunately, few Australians enjoy a comfortable retirement. In fact, many retirees rely solely on the basic retirement benefits provided by the Age Pension.

Modest vs. Comfortable lifestyle

One guide that provides a useful reference is the Westpac/Australian Superannuation Funds Association (ASFA) Retirement Living Standard. This standard sets out weekly budgets for ‘modest’ and ‘comfortable’ standards of living for singles and couples in retirement.

ASFA estimates that, as at the December quarter 2012, in general, a couple looking to achieve a comfortable retirement needs to spend $56,339 a year, while those seeking a ‘modest’ retirement lifestyle need to spend $32,555 a year. A single comfortable retirement comes in at $41,186 a year, while a modest lifestyle for a single person is budgeted at $22,585. 

The Westpac-ASFA standard defines modest and comfortable lifestyles as being:

  • Modest lifestyle in retirement - a better lifestyle than that provided by the Age Pension, but limited to fairly basic activities.
  • A more comfortable lifestyle in retirement - enabling an older, healthy retiree to be involved in a broad range of leisure and recreational activities and to have a good standard of living through the purchase of such things as household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel.

See the Westpac-ASFA Retirement Standard.

Use our calculator to see if you will have enough super for your retirement.

After-tax income before retirement

Our view is that people should aim to achieve retirement income from a variety of sources, which is equivalent to their after-tax income before retirement.

 How many years of retirement can you expect?

On the whole we are living longer. Actuaries, (financial specialists who calculate statistical probabilities based on facts and trends), have noted that life expectancy in Australia has been increasing steadily for some time.

Governments rely on actuarial calculations for planning purposes and, from time-to-time, the Government actuary publishes life expectancy tables to provide objective data to the public.

As you can see in the table on the below, based on probabilities:

  • Men who are currently 55 years of age are expected to live until they are 82 - another 27 years.
  • Women who are now 55 years of age are likely to live until they are 86 - almost another 31 years.
 Life Table 2008 - 2010*
Age now Life Expectancy
(years from now)
To age
(rounded up)
   Men Women  Men  Women 
 45 36.3  40.0   81 85 
 55 27.3 30.8  82 86
 65  18.9 21.8   84 87
 75  11.5 13.7  86 89
 85  6.0 7.1   91 92

 *Released by Australian Bureau of Statistics, November 2011

I want to speak to an Adviser about my retirement

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Last updated on 16th December 2013