What's your Retirement Number?

Most people within a decade of retirement know their bank balance and their superannuation balance fairly precisely. Far fewer know their retirement number: the amount they actually need to have saved by the time they stop working, to support the income they'll need for the rest of their life. These are different questions. Knowing what you've got today does not tell you whether it is enough, and “enough” is what the Retirement Number is designed to answer (though only approximately of course).

What the Retirement Number actually measures

The retirement number is not a simple figure pulled from a rule of thumb; instead, it represents the amount of savings, across all of a household's assets, required to generate the income the household plans to live on each year in retirement. Work out what you'll spend, work out what your combined savings and investments can sustainably produce, and the Retirement Number falls out of that comparison.

Starting with what you'll actually spend

Essential costs, such as housing, utilities, food, insurance, health, form the base of the spending figure, with lifestyle spending, like travel, dining out, hobbies, family activities, etc., layered on top. The Association of Superannuation Funds of Australia publishes quarterly benchmark figures for what “comfortable” and “modest” retirement lifestyles cost, currently $78,566 a year for a comfortable retirement as a couple and $55,923 for a single person, against $52,473 and $36,434 for a more modest lifestyle. These are useful starting reference points, not a personalised figure, since actual spending varies significantly from one household to the next. Your idea of comfortable or modest may be considerably different.

Where the income can actually come from

For someone who has spent a working life accumulating wealth, retirement income can be drawn from several places, and most households end up using more than one. Superannuation is usually the largest source, converted into a regular income through an Account-Based Pension, a flexible income stream drawn from a super balance once a person retires, with investment earnings inside the pension generally untaxed.

Outside super, non-super savings and investments, like shares, exchange traded funds, term deposits and investment property, can generate income directly through dividends, distributions, interest or rent. Or capital from some of these can be drawn down alongside superannuation.

Some retirees may also use an annuity, a product purchased with a lump sum in exchange for a guaranteed income for a set period or for life, to cover essential expenses with more certainty. An investment bond is another option worth knowing about, a tax-paid structure built up over a working life and drawn on in retirement without the contribution and access rules that apply to superannuation. Other sources of wealth might include an inheritance, the proceeds of downsizing the family home, or continued part-time work, often play a role too, even where they were never part of the original plan.

Where the Age Pension fits in

The Age Pension can also form part of the picture, though for many households in this position it's a supporting element rather than the main event. Many retirees, particularly in the earlier years, will not be eligible for any pension while their assessable assets sit above the relevant thresholds. Others become eligible for a part pension over time, as savings are drawn down.

At current rates, effective 20 March to 19 September 2026, the maximum single pension is $1,178.70 a fortnight and the maximum couple combined rate is $1,777.00 a fortnight, including supplements. These rates are indexed every March and September and are due to change again from 20 September.

Where it applies, the pension reduces the amount a household needs to draw from its own income sources. Where it doesn't, those other sources need to cover the full amount.

Turning the gap into a number

Once spending is known, and it's clear how much of that spending will be met from the various sources, the Retirement Number is the total savings across all of these needed to sustain that combined income for what could be a twenty or thirty year retirement. Calculate your average life expectancy, allow some extra years for Longevity Risk (a whole other topic), and then consider if you need to allow funds for inheritances that you may wish to include, and we approach our magic “Retirement Number”.

As a general guide, ASFA estimates that a couple needs around $730,000 in savings to fund a comfortable retirement, assuming some part Age Pension support later on, and a single person around $630,000. Though it’s worth considering there is no allowance for later unexpected expenses, such as Aged Care or Inheritances, and the chance of outliving your assets is real at these amounts.

Households who expect little or no Age Pension in the earlier years, or who hold a meaningful mix of assets outside superannuation, should treat these figures as a loose starting point rather than a target, since the right number depends heavily on which assets are actually funding the income. These figures are broad benchmarks, not a personal figure; a household's actual number depends on its own spending expectations, the mix of assets it holds, and how long the money needs to last.

Why “probably fine” is different from “I’ve done my numbers”

Most people approaching retirement have a reasonable, well-founded sense that things will work out, and that instinct is often right. The difference between “probably fine” and “we know we'll be fine” is the work involved in actually calculating this number. Once spending, the income the full mix of assets can sustainably produce, and any Age Pension entitlement are laid out side by side, a general sense of confidence becomes a specific, checkable answer. It also shows, well before retirement itself, whether anything is worth adjusting: savings, timing, or how assets are currently structured.

A number worth having early

The most useful time to work out a Retirement Number is while retirement still feels a few years away, while there's time to act on the answer. For a household that has never worked out its own number, doing so is often the single step that turns “we'll probably be fine” into an actual plan.

In the end, your Retirement Number maybe be a completely different one; such as when can I retire, or how long will what I’ve got last? Let’s start a conversation to find out what your Retirement Number is.