Contents

*Note:** This article is updated every 6 months or so with new figures, covering retirement incomes when retiring at age 58, age 61, age 66, age 67 and age 70. The article allows readers to compare what a $1 million retirement can deliver if retirement savings are invested with returns of 7% each year, or if invested on retirement with returns of 5% a year. If you opt for a 5% investment return, rather than, say, 7% return, during retirement, then you will need to accept a lower annual income for the same lump sum in retirement. If you retire at an older age, then your $1 million will deliver a higher income for a set number of years, or your required income will last longer. The annual income figures (where relevant) include Age Pension rates effective from 20 September 2017, and the 2017 changes to the Age Pension assets test since 1 January 2017. Latest article update is February 2018.*

I am often asked the question ‘how much super is enough for a worry-free retirement?’, and we regularly update our special *SuperGuide *articles on this topic for our readers. In this article, I’m answering the question: what does a $1 million retirement look like? This article forms part of a three-part series ($1 million retirement when investments return 7% or 5%, a $1 million retirement when investments return 3% or 2%, and a $1.6 million retirement), for those readers who want a truly comfortable life in retirement. See links for the other 2 articles at the end of this article, and also within this article.

Due to Age Pension entitlements and eligibility rules, the majority of Australians will not need $1 million in today’s dollars to have a ‘comfortable’ retirement (that is a retirement income of just over $60,000 a year for a couple, and just over $44,000 a year for single person), but an increasing number of Australians are planning for (or at least hoping for) a more-than-comfortable retirement lifestyle. (For information on a comfortable lifestyle in retirement, see *SuperGuide* article How much super do you need to retire comfortably?.)

In this article, we do the numbers for those who are aiming to accumulate the magic $1 million for retirement. Due to the many requests from readers, we have updated the calculations to include annual retirement incomes based on your savings being invested at 5% per annum, as well as returning 7% each year. We have also updated the article to include calculations for those retiring at age 58 (new minimum age for accessing super), age 67 (aligning with the increasing Age Pension age), or age 70 (for those who wish to work longer, or need to work longer), as well as age 61 and age 66.

**Note: **You can also discover what a $1 million retirement looks like by trying *SuperGuide’s* easy-to-use $1 million Retirement Reckoner.** **For those readers expecting much lower investment returns in retirement (that is 3% or 2% a year), see *SuperGuide* article Low yields: A $1 million retirement on 3% or 2% returns. In a related article, we also crunch the numbers for those readers who aspire to a $1.6 million retirement (see *SuperGuide* article Crunching the numbers: a $1.6 million retirement, reflecting the new cap on the amount you can transfer to retirement phase).

**Quick access to updated tables: **If you’re a regular reader of this article, then you can access the updated tables by clicking on the links immediately below. If you are reading this article for the first time, then we strongly encourage you to continue reading the text below rather than clicking immediately to the tables (we provide links to the tables throughout the article). This article highlights the importance of investment returns, retirement age and Age Pension entitlements when determining the level of annual retirement income you can expect, and how long that income will last. We have created a table for couples (Table 1) and a table for singles (Table 2) due to the different Age Pension treatment for singles and couples.

- Table 1: If you’re part of a COUPLE and retire with $1 million
- Table 2: If you’re SINGLE and retire with $1 million

*Important: **The calculations contained in this article are merely a conversation-starter for your retirement plans. The assumptions used for the calculations appear at the end of the article.*

## Remember, you may not need $1 million…

If $1 million or $1.6 million in retirement (for $1.6 million figures see article link at end of article) is beyond your wildest dreams then check out our other *SuperGuide* articles dealing with the topic of how much super do I need? Even when you have a small amount of super savings, you may be pleasantly surprised by what your retirement savings can deliver, especially if you’re entitled to a FULL or PART Age Pension.

According to ASFA, you can live a modest life in retirement on around **$35,189** a year as a couple, and a comfortable life on just over **$60,000** a year, and the lump sums you need for $60,000 a year are well under $1 million, when you take into account the Age Pension.

For example, assuming Age Pension age is 66 years (Age Pension age is now 65.5 years, and increasing to at least 66 years from July 2019 for those born after December 1953), a couple can secure a modest lifestyle with hardly any private savings ($3,000), because the FULL Age Pension for a couple is now **$34,507** (applicable since 20 September 2017, and excluding Energy Supplement). Without the Age Pension, a couple would need a lump sum of **$590,000** to deliver the equivalent annual retirement income of $34,507 (assuming retirement assets are generating a 7% return), or **$930,000** (if retirement assets are generating a 3% return) until after the age of 91.

**In comparison:** With a healthy PART Age Pension, a lump sum of around **$450,000** can deliver a couple roughly **$60,500** (indexed) a year in retirement until after the age of 91, and roughly **$56,150** (indexed) a year until after the age of 101, according to the ASIC MoneySmart Retirement Planner, and assuming the money is invested in assets that return 7% a year, and the couple retire at age 66.

*Note:** Investment returns can make a huge difference to the amount of money you need to save for retirement. If your money is returning only 5% a year (rather than 7%), then you will need at least an extra $170,000 as a couple to finance $60,000 a year (indexed) for 25 years, that is, until after the age of 91 (including Age Pension entitlements). If your money is returning only 3% a year (rather than 7%), then you will need virtually double the amount of savings – at least an extra $440,000 as a couple to finance $60,000 a year (indexed) for 25 years, that is, until after the age of 91 (including Age Pension entitlements).*

For more information on to achieve a comfortable retirement without $1 million, read the *SuperGuide* article How much super do you need to retire comfortably?

**Tip:** After reading this article, if you’re aspiring to a $1 million retirement then it may be worthwhile having a chat with a financial adviser or an accountant about the most tax-effective, and ‘risk appropriate’ way to get there.

## So, what can $1 million generate in terms of an annual tax-free income in retirement?

Continue reading to find out what $1 million in today’s dollars can deliver you if you want your lifestyle to last until after the age of 91 or if you want your money to last until after the age of 101, or somewhere in between. The average life expectancy for a 66-year-old woman is 87 years (87.18), while average life expectancy for a 65-year-old man is 84.5 (84.41) years. Recognising that life expectancies are an average, and that roughly half of all Australians will live beyond their average life expectancy, we have based the calculations on the level of income lasting until after age 91, and lasting until after age 101.

If you retire at an age older than 66, for simplicity, the calculations remain based on the money lasting until after age 91, and until after age 100. We provide figures for a couple, or a single person, and where relevant, we include any Age Pension entitlements.

Even so, not everyone plans, or is able, to retire at age 66 (or whatever your Age Pension age is: to find out your Age Pension age see *SuperGuide* articles *SuperGuide* articles Age Pension age increasing to 67 years and Retirement Age Reckoner: Discover your preservation age and Age Pension age).

The tables and text below outline the annual incomes you can expect if you retire with $1 million, and you retire at age 58, 61, 66, 67 or age 70. You can also see the different incomes you can expect depending on whether you invest your retirement money generating a return of 7% or 5%, and whether you want your money to last until after age 91, or until after age 101.

**Note:** If you plan to retire at age 58, the figures in Table 1 (for a couple) and in Table 2 (for a single person), assume your preservation age is 58 years or younger. If you plan to retire at age 66, the figures assume your Age Pension age is 66 years or younger. Links to the tables appear below.

**Quick access to updated tables: **If you’re a regular reader of this article, then you can access the updated tables by clicking on the links immediately below. If you are reading this article for the first time, then we strongly encourage you to continue reading the text below rather than clicking immediately to the tables.

- Table 1: If you’re part of a COUPLE and retire with $1 million
- Table 2: If you’re SINGLE and retire with $1 million

**Summary point, for a couple: **A couple retiring today at age 66 with **$1 million** can expect an indexed annual retirement income of between **$77,663** (from age 66 until after age 91, and 7% return) and **$59,784** (from age 66 until after age 101, and 5% return). A couple retiring today at age 58 with **$1 million** can expect an indexed annual retirement income of between **$68,651** (from age 66 until after age 91, and 7% return) and **$54,904** (from age 58 until after age 101, and 5% return). See text and Table 1 (later in the article) for further explanation. We assume Age Pension age is 66 years or younger when retiring at age 66, and preservation age is 58 years or younger, when retiring at age 58.

**Summary point, for single person:** A single person retiring today at age 66 with **$1 million** can expect an indexed annual retirement income of between **$65,854** (from age 66 until after age 91, and based on 7% return) and **$46,689** (from age 66 until after age 91, and based on 5% return). A single person retiring today at age 58 with **$1 million** can expect an indexed annual retirement income of between **$57,204** (from age 58 until after age 91, and based on 7% return) and **$41,964** (from age 58 until after age 91, and based on 5% return). See text later in the article and Table 2 for further explanation. We assume your Age Pension age is 66 years or younger when retiring at age 66, and preservation age is 58 years or younger, when retiring at age 58.

**Important:**The assumptions we use for this article and for Tables 1 and 2 appear at the end of the article.

We have created a table for couples (Table 1) and a table for singles (Table 2) due to the different Age Pension treatment for singles and couples. Click on the links immediately below to access the tables, or continue scrolling down the page for further information explaining the lump sum amounts appearing in the tables.

- Table 1: If you’re part of a COUPLE and retire with $1 million
- Table 2: If you’re SINGLE and retire with $1 million

**Note:** The $1 million scenarios referred to in this article allow for 3% inflation when working out annual incomes, so the figures in these features automatically allow for the annual adjustment in retirement incomes. For further explanation of why planning for retirement using today’s dollars is more helpful than using tomorrow’s dollars, see *SuperGuide* article Retirement income: Today’s dollars, and why $1 million can’t last forever.

## If you’re part of a COUPLE and retire with $1 million

Due to a stricter Age Pension assets test which took effect from January 2017, a couple with **$1 million** in super on retirement will only be eligible for a PART Age Pension later on in retirement, rather than when first retired. For those retiring before Age Pension age, spending a higher amount of superannuation savings in the earlier years, may mean a small PART Age Pension entitlement when they reach Age Pension age.

**Note:** Also, due to the more generous treatment of assets for a couple when determining eligibility for the Age Pension (compared with a single person), a couple who retire with **$1 million** in super on retirement, are more likely to receive a PART Age Pension, when eventually they become eligible for a PART Age Pension later in retirement. Within Table 1, we indicate when a PART Age Pension starts using the term ‘part AP’

The scenarios for a couple are divided into five timeframes (also see Table 1 and supporting text):

- Couple – retiring at age 58 (current minimum age for accessing super)
- Couple – retiring at age 61
- Couple – retiring at age 66
- Couple – retiring at age 67
- Couple – retiring at age 70

**TIP:** You can also use *SuperGuide’s* $1 million Retirement Reckoner to compare the annual retirement income (indexed) amounts listed in the table below. The Reckoner allows you to click on different retirement ages (age 58 or 61 or 66 or 67 or 70), different rates of investment returns (2%, 3%, 5% or 7%) and different life expectancies (until after age 91 or until after age 101), to compare the level of retirement income you can expect.

#### Table 1: A $1 MILLION retirement (in today’s dollars) for a COUPLE

Investment return during retirement | 7% return on savings | 5% return on savings | ||
---|---|---|---|---|

Money lasts until at least: | Age 91 | Age 101 | Age 91 | Age 101 |

Annual income (indexed) when RETIRE at: | ||||

Age 58* | $68,651 | $62,691 | $60,589 | $54,904 |

Part AP | from age 67 | from age 67 | from age 67 | from age 67 |

Age 61 | $71,742 | $64,380 | $63,833 | $56,680 |

Part AP | from age 67 | from age 67 | from age 67 | from age 67 |

Age 66 | $77,663 | $67,512 | $69,661 | $59,784 |

Part AP | from age 70 | from age 72 | from age 70 | from age 71 |

Age 67 | $79,161 | $68,292 | $71,058 | $60,536 |

Part AP | from age 71 | from age 73 | from age 71 | from age 72 |

Age 70 | $84,352 | $70,847 | $76,226 | $62,951 |

Part AP | from age 74 | from age 75 | from age 73 | from age 74 |

**Tax may be payable on income when retiring before the age of 60, and the figures for age 58, assume your preservation age for accessing super is 58 years or younger.*

*Note: **See end of article for assumptions. ‘Part AP’ stands for PART Age Pension. Figures calculated using ASIC MoneySmart retirement planner calculator (**www.moneysmart.gov.au**)*

**Note:** Continue reading this section for a plain-English explanation of the contents of Table 1. If you are seeking the annual retirement income figures for a single person, then refer to Table 2: If you’re SINGLE and retire with $1 million.

### Couple – retiring at age 58

If you want to retire before the age of 60, for example age 58, then your super savings will have to finance a longer life in retirement, and you can expect to pay some tax on your pension income. You cannot claim the Age Pension until you reach your Age Pension age (for information on your Age Pension age, see *SuperGuide* articles Age Pension age increasing to 67 years and Retirement Age Reckoner: Discover your preservation age and Age Pension age).

You must have reached your preservation age to access your super benefits. The minimum preservation age has increased to 58 years, and anyone born on or after 1 July 1962 has a preservation age of at least 58 years, and preservation age increases to age 60 for those born on or after 1 July 1964 (for more information about your preservation age, see *SuperGuide* articles Accessing super: What is my preservation age? and Retirement Age Reckoner: Discover your preservation age and Age Pension age).

*Ignoring tax and assuming your retirement savings are invested at 7%*, if you retire today at age 58 with **$1 million** in super, as a couple, your savings can deliver you:

- A retirement income of
**$68,651**(indexed) a year until after the age of 91 (which includes a PART Age Pension from the age of 67). **$62,691**(indexed) a year until after the age of 101 (which includes PART Age Pension entitlements from the age of 67).

*Ignoring tax and assuming your retirement savings are invested at 5%,* if you retire today at age 58 with **$1 million** in super, as a couple, your savings can deliver you:

- A retirement income of
**$60,589**(indexed) a year until after the age of 91 (which includes a PART Age Pension from the age of 67). **$54,904**(indexed) a year until after the 101 (which includes PART Age Pension entitlements from the age of 67).

### Couple – retiring at age 61

If you retire before the age of 65 but after the age of 60, for example age 61, you can still expect tax-free pension payments although you will only be able to claim the Age Pension (if eligible) when you reach Age Pension Age (now increased to 65.5 years and increasing to 66 years from July 2019, and eventually to age 67, depending on your date of birth – for more information, see *SuperGuide’s* Retirement Age Reckoner: Discover your preservation age and Age Pension age).

*Assuming your retirement savings are invested at 7%*, if you retire today at age 61 with **$1 million** in super, as a couple, your savings can deliver you:

- A retirement income of around
**$71,742**(indexed) a year until after the age of 91 (which includes a PART Age Pension from the age of 67). **$64,380**(indexed) a year until after the age of 101 (including a PART Age Pension from the age of 67).

*Assuming your retirement savings are invested at 5%,* if you retire today at age 61 with **$1 million** in super, as a couple, your savings can deliver you:

- A retirement income of
**$63,833**(indexed) a year until after the age of 91 (which includes a PART Age Pension from the age of 67). **$56,680**(indexed) a year until after the age of 101 (including a PART Age Pension from the age of 67).

### Couple – retiring at age 66

*Assuming your retirement savings are invested at 7%,* if you retire today, at the age of 66 (assuming you have reached your Age Pension age) with **$1 million** in super, as a couple, your savings can deliver you:

- a retirement income of around
**$77,663**(indexed) a year until after the age of 91 (which includes a PART Age Pension from the age of 70) - around
**$67,512**(indexed) a year until after the age of 101 (which includes a PART Age Pension from the age of 72).

*Assuming your retirement savings are invested at 5%,* if you retire today, at the age of 66 (assuming you have reached your Age Pension age) with **$1 million** in super, as a couple, your savings can deliver you:

- a retirement income of
**$69,661**(indexed) a year until after the age of 91 (which includes a PART Age Pension from the age of 70) **$59,784**(indexed) a year until after the age of 101 (which includes a PART Age Pension from the age of 71).

### Couple – retiring at age 67

*Assuming your retirement savings are invested at 7%,* if you retire today, at the age of 67 with **$1 million** in super, as a couple, your savings can deliver you:

- a retirement income of around
**$79,161**(indexed) a year until after the age of 91 (which includes a PART Age Pension from the age of 71) **$68,292**(indexed) a year until after the age of 101 (which includes a PART Age Pension from the age of 73).

*Assuming your retirement savings are invested at 5%,* if you retire today, at the age of 67 with **$1 million** in super, as a couple, your savings can deliver you:

- a retirement income of
**$71,058**(indexed) a year until after the age of 91 (which includes a PART Age Pension from the age of 71) **$60,536**(indexed) a year until after the age of 101 (which includes a PART Age Pension from the age of 72).

### Couple – retiring at age 70

*Assuming your retirement savings are invested at 7%,* if you retire today, at the age of 70 with **$1 million** in super, as a couple, your savings can deliver you:

- a retirement income of
**$84,352**(indexed) a year until after the age of 91 (which includes a PART Age Pension from the age of 74) - around
**$70,847**(indexed) a year until after the age of 101 (which includes a PART Age Pension from the age of 75).

*Assuming your retirement savings are invested at 5%,* if you retire today, at the age of 70 with **$1 million** in super, as a couple, your savings can deliver you:

- a retirement income of
**$76,226**(indexed) a year until after the age of 91 (which includes a PART Age Pension from the age of 73) **$62,951**(indexed) a year until after the age of 101 (which includes a PART Age Pension from the age of 74).

**Important:**The $1 million scenarios referred to in this article allow for 3% inflation when working out annual incomes, so the figures in these features automatically allow for the annual adjustment in retirement incomes. For further explanation of why planning for retirement using today’s dollars is more helpful than retirement planning using tomorrow’s dollars, see

*SuperGuide*article Retirement income: Today’s dollars, and why $1 million can’t last forever.

**Note: **For those readers expecting much lower investment returns in retirement (that is 3% or 2% a year), see *SuperGuide* article Low yields: A $1 million retirement on 3% or 2% returns. In a related article, I also crunch the numbers for those readers who aspire to a $1.6 million retirement (see *SuperGuide* article Crunching the numbers: a $1.6 million retirement). If you don’t plan to have $1 million in super and you want a comfortable retirement, see *SuperGuide* article How much super do you need to retire comfortably?

**TIP ONE:** You can also use *SuperGuide’s* $1 million Retirement Reckoner to compare the annual retirement income (indexed) amounts listed in Table 1 (for a couple). The Reckoner allows you to click on different retirement ages (age 58 or 61 or 66 or 67 or 70), different rates of investment returns (2%, 3%, 5% or 7%) and until after age 91 or, until after age 101), to compare the level of retirement income you can expect.

**TIP TWO:** You can also try our easy-to-use *SuperGuide* How Much Super Is Enough Reckoner. You can find out the super savings you will need for a $50,000 a year retirement, a $60,000 a year retirement, a $150,000 a year retirement, and annual retirement incomes in between these amounts.

## If you’re SINGLE and retire with $1 million

**Summary point, for single person:** A single person retiring today at age 66 with **$1 million** can expect an indexed annual retirement income of between **$65,854** (from age 66 until after age 91, and based on 7% return) and **$46,689** (from age 66 until after age 91, and based on 5% return). A single person retiring today at age 58 with **$1 million** can expect an indexed annual retirement income of between **$57,204** (from age 58 until after age 91, and based on 7% return) and **$41,964** (from age 58 until after age 91, and based on 5% return). See text later in the article and Table 2 for further explanation. We assume your Age Pension age is 66 years or younger when retiring at age 66, and preservation age is 58 years or younger, when retiring at age 58.

The scenarios for a single person are divided into five timeframes (also see text and Table 2 below):

- Single person – retiring at age 58 (current minimum age for accessing super)
- Single person – retiring at age 61
- Single person – retiring at age 66
- Single person – retiring at age 67
- Single person – retiring at age 70

**TIP:** You can also use *SuperGuide’s* $1 million Retirement Reckoner to compare the annual retirement income (indexed) amounts listed in the table below.

#### Table 2: A $1 MILLION retirement (in today’s dollars) for a SINGLE PERSON

Investment return during retirement | 7% return on savings | 5% return on savings | ||
---|---|---|---|---|

Money lasts until at least: | Age 91 | Age 101 | Age 91 | Age 101 |

Annual income (indexed) when RETIRE at: | ||||

Age 58* | $57,204 | $50,879 | $48,238 | $41,964 |

Part AP | from age 75 | from age 80 | from age 72 | From age 75 |

Age 61 | $60023 | $52,451 | $50,925 | $43,527 |

Part AP | from age 77 | from age 82 | from age 74 | from age 77 |

Age 66 | $65,854 | $55,663 | $56,844 | $46,689 |

Part AP | from age 79 | from age 84 | from age 77 | from age 81 |

Age 67 | $67,338 | $56,402 | $58,296 | $47,433 |

Part AP | from age 80 | from age 85 | from age 78 | from age 81 |

Age 70 | $72,551 | $58,962 | $63,518 | $49,962 |

Part AP | from age 81 | from age 86 | from age 80 | from age 83 |

**Tax may be payable on income when retiring before the age of 60, and the figures for age 58, assume your preservation age for accessing super is 58 years or younger.*

*Note:** See end of article for assumptions. ‘Part AP’ stands for PART Age Pension. Figures calculated using ASIC MoneySmart retirement planner calculator (**www.moneysmart.gov.au**)*

### Single person – retiring at age 58

If you want to retire before the age of 60, for example age 58, then you can expect to pay some tax on your pension income. You cannot claim the Age Pension until you reach your Age Pension age (for information on your Age Pension age, see *SuperGuide* articles Age Pension age increasing to 67 years and Retirement Age Reckoner: Discover your preservation age and Age Pension age).

You must have reached your preservation age to access your super benefits. The minimum preservation age has increased to 58 years, and anyone born on or after 1 July 1962 has a preservation age of at least 58 years, and preservation age increases to age 60 for those born on or after 1 July 1964 (for more information about your preservation age, see *SuperGuide* articles Accessing super: What is my preservation age? and Retirement Age Reckoner: Discover your preservation age and Age Pension age).

*Assuming your retirement savings are invested at 7%,* if you retire at age 58 with **$1 million **in super, as a single person, your savings can deliver you:

- A retirement income of
**$57,204**(indexed) a year until after the age of 91 (which includes a PART Age Pension from the age of 75). - A retirement income of
**$50,879**(indexed) a year until after the age of 91 (which includes a PART Age Pension from the age of 80).

*Assuming your retirement savings are invested at 5%,* if you retire at age 58 with **$1 million **in super, as a single person, your savings can deliver you:

- A retirement income of
**$48,238**(indexed) a year until after the age of 91 (which includes a PART Age Pension from the age of 72). - A retirement income of
**$41,964**(indexed) a year until after the age of 101 (which includes a PART Age Pension from the age of 75).

### Single person – retiring at age 61

If you retire before the age of 65 but after the age of 60, for example age 61, you can still expect tax-free pension income although you will only be able to claim the Age Pension (if eligible) when you reach Age Pension Age (now increased to 65.5 years and increasing to 66 year from July 2019, and eventually increasing to age 67, depending on your date of birth – for more information, see *SuperGuide’s* Retirement Age Reckoner: Discover your preservation age and Age Pension age).

*Assuming your retirement savings are invested at 7%,* and you retire today at age 61 with **$1 million** in super, as a single person, your savings can deliver you:

- A retirement income of
**$60,023**(indexed) a year until after the age of 91 (which includes a PART Age Pension from the age of 77). **$52,451**(indexed) a year until after the age of 101 (which includes a PART Age Pension entitlement from the age of 82).

*Assuming your retirement savings are invested at 5%*, and you retire today at age 61 with **$1 million** in super, as a single person, your savings can deliver you:

- A retirement income of
**$50,925**(indexed) a year until after the age of 91 (which includes a PART Age Pension from the age of 74). **$43,527**(indexed) a year until after the age of 101 (which includes a PART Age Pension entitlement from the age of 77).

### Single person – retiring at age 66

*Assuming your retirement savings are invested at 7%,* if you retire today, at the age of 66 (assuming this is your Age Pension age) with **$1 million** in super, as a single person, your savings can deliver you:

- a retirement income of
**$65,854**(indexed) a year until after the age of 91 (which includes a PART Age Pension from the age of 79). **$55,663**(indexed) a year until after the age of 101 (which includes a PART Age Pension from the age of 84).

*Assuming your retirement savings are invested at 5%*, if you retire today, at the age of 66 (assuming this is your Age Pension age) with **$1 million** in super, as a single person, your savings can deliver you:

- a retirement income of
**$56,844**(indexed) a year until after the age of 91 (which includes a PART Age Pension from the age of 77). **$46,689**(indexed) a year until after the age of 101 (which includes a PART Age Pension from the age of 81).

### Single person – retiring at age 67

*Assuming your retirement savings are invested at 7%,* and you retire today at age 67 with **$1 million** in super, as a single person, your savings can deliver you:

- A retirement income of
**$67,338**(indexed) a year until after the age of 91 (which includes a PART Age Pension from the age of 80). **$56,402**(indexed) a year until after the age of 101 (which includes a PART Age Pension entitlement from the age of 85).

*Assuming your retirement savings are invested at 5%*, and you retire today at age 67 with **$1 million** in super, as a single person, your savings can deliver you:

- A retirement income of
**$58,296**(indexed) a year until after the age of 91 (which includes a PART Age Pension from the age of 78). **$47,433**(indexed) a year until after the age of 101 (which includes a PART Age Pension entitlement from the age of 81).

### Single person – retiring at age 70

*Assuming your retirement savings are invested at 7%,* if you retire today, at the age of 70 with **$1 million** in super, as a single person, your savings can deliver you:

- a retirement income of
**$72,551**(indexed) a year until after the age of 91 (which includes a PART Age Pension from the age of 81). **$58,962**(indexed) a year until after the age of 101 which includes a PART Age Pension from the age of 86).

*Assuming your retirement savings are invested at 5%*, if you retire today, at the age of 70 with **$1 million** in super, as a single person, your savings can deliver you:

- a retirement income of
**$63,518**(indexed) a year until after the age of 91 (which includes a part Age Pension from the age of 80). **$49,962**(indexed) a year until after the age of 101 (which includes a part Age Pension from the age of 83).

**Important:**The $1 million scenarios referred to in this article allow for 3% inflation when working out annual incomes, so the figures in these features automatically allow for the annual adjustment in retirement incomes. For further explanation of why planning for retirement using today’s dollars is more helpful than retirement planning using tomorrow’s dollars, see

*SuperGuide*article Retirement income: Today’s dollars, and why $1 million can’t last forever

**.**

**Note one: **For those readers expecting much lower investment returns in retirement (that is 3% or 2% a year), see *SuperGuide* article Low yields: A $1 million retirement on 3% or 2% returns. In a related article, I also crunch the numbers for those readers who aspire to a $1.6 million retirement (see *SuperGuide* article Crunching the numbers: a $1.6 million retirement). You can also use *SuperGuide’s* $1 million Retirement Reckoner to compare the annual retirement income (indexed) amounts listed in Table 2 (for a single person). The Reckoner allows you to click on different retirement ages (age 58 or 61 or 66 or 67 or 70), different rates of investment returns (2%, 3%, 5% or 7%) and until after age 91 or, until after age 101), to compare the level of retirement income you can expect.

**Note two:** If you don’t plan to have $1 million in super and you want a comfortable retirement, see *SuperGuide* article How much super do you need to retire comfortably? You can also try our easy-to-use *SuperGuide* How Much Super Is Enough Reckoner. You can find out the super savings you will need for a $50,000 a year retirement, a $60,000 a year retirement, a $150,000 a year retirement, and annual retirement incomes in between these amounts.

#### $1 million retirement: Assumptions for text and Tables 1 and 2 (click to open and close)

## For more articles on how much super is enough…

If you are seeking more information about how much super is enough to live comfortably, then check out the following *SuperGuide* articles:

- How much super do you need to retire comfortably?
- Retirement income: Living on more than $60,000 a year
- Retirement income: Want to live on $100,000 a year?
*SuperGuide*How Much Super Is Enough Reckoner- Retirement income: Today’s dollars, and why $1 million can’t last forever
- Low yields: A $1 million retirement on 3% or 2% returns
- Crunching the numbers: a $1.6 million retirement
- $1 million Retirement Reckoner
- Life expectancy: Will you outlive your retirement savings?
- Retirement income: Come on, how much super do I really need?
- Retirement Age Reckoner: Discover your preservation age and Age Pension age
- The super challenge: At what age should I retire?

I suggest do some scenarios using 2% as the rate of return, given that is a reasonable percentage if one wants capital guaranteed rates of return, at least in the short to medium term.

Hi Andrew – I didn’t have a chance to respond to your suggestions when you first commented, but just letting you know we did take your comments on board and we published a second article on $1 million retirements using 2% and 3% yields when calculating the lump sums amounts required. https://www.superguide.com.au/boost-your-superannuation/low-yields-a-1-million-retirement-2-3-returns

This article was published a week after your comments. We have just updated these suite of articles. We will also be updating these articles every 6 months or so.

Regards Trish Power

I think the 5% return is not easily achieved? We have our money in bank term deposits and we are lucky to get 2% or 3%. We did not invest in property or shares or Govt bonds.

Hi Glenda – I didn’t have a chance to respond to your suggestions when you first commented, but just letting you know we did take your comments on board and we published a second article on $1 million retirements using 2% and 3% yields when calculating the lump sums amounts required. https://www.superguide.com.au/boost-your-superannuation/low-yields-a-1-million-retirement-2-3-returns

This article was published a week after your comments. We have just updated these suite of articles. We will also be updating these articles every 6 months or so.

Regards Trish Power

Hi Trish,

I have “plugged” your figures and assumptions in to the ASIC Retirement calculator and the results are substantially less than you have indicated. Have you re-tested these calculations with the current ASIC calculator?

Hi Robert

Thanks for your email.

We use slightly different assumptions (which we disclose at the end of the article) to the ASIC default assumptions, so the results will be different. We do this to ensure our calculations reflect returns after fees, and to ensure that we can track other websites that illegally copy our articles (unfortunately this happens). Great news that the article has prompted you to use the calculator.

You do mention that you used our assumptions – the ASIC calculator automatically deducts a lump sum on retirement (which I remove), which dramatically changes the calculation – you have to manually do this, once you go into results, and keep on clicking until the ‘spending in year 1’ pops up. You also have to manually put fees to zero and even when you go on the ‘How it works’ page, this sometimes defaults as well. You also need to check the investment return which has to be manually changed to 5% and 7%, and then double-checked because it can revert to the default.

I will check the figures again, although the fiddly aspects to the calculator (if you change the default assumptions) can make it confusing.

Regards

Trish

So if I retired at age 65 with $1million @7% and drew $79k pa (indexed) until age 87 I presume the balance would be decreased to zero. Is that correct?

Hi Mike

Thanks for your question. Yes, that is the assumption for the table that I have created. The individual would then rely only on the Age Pension from age 88, at that income level. You can use the ASIC calculator to change any of the assumptions, including having your money last longer (but at lower income levels).

Regards

Trish

Dear Trish what is nick bruining referring to when he says if you tick all the boxes before tomorrow 27 February and you retired before 2009 you have the opportunity for the $76000 ? Sincerely john kemp – this was broadcast on the Geoff Hutchinson abc morning programme ?

Hi John

He is referring to the Age Pension bonus – you can find more information by clicking on our article – https://www.superguide.com.au/how-super-works/goodbye-pension-bonus-hello-work-bonus

Regards

Trish

What will the proposed change to franking credits cost the government in terms of increased superannuation payouts as the result of lost franking income?

Thanks for the excellent articles and information. Told me exactly what I wanted to know and alerted me to the fallacy of believing that my capital would not diminish over time.

Will $950000 be enough to retire on?

My wife is 59 and wants to retire next year at 60 and I am about to retire this month.

We own our house and vehicles and have virtually no debt except utilities. Our electricity is covered by substantially by our solar panels, hence only a few outlays- rates,food, clothing, registration / car insurance.

Regards

Ken

Hi Trish,

I am turning 65 in August. My husband is 66 and receiving a part aged pension. If I wish not to apply for a pension at 64 1/2, do I have to advise centrelink of the amount held in my super account before August?

One of your assumptions is “No money is spent in year one before commencing retirement income stream….” I didn’t know what this meant but when I went to the ASIC site I could see that you can enter an additional amount you might spend in the first year on a holiday, renovations etc. Is this what you are referring? It doesn’t seem to be “before commencing retirement income stream” but seems to be in addition.

I also recommend people go and try the calculator for themselves at the ASIC MONEYSMART site as it is very interesting. However read the assumptions such as those around additional assets outside superannuation (taken into account to reduce pension calculations via deeming rate but not included in your annual income calculation) and where there is an age difference between partners in terms of when the pension is considered (not till both are of pension age) so you realise why the results maybe are not quite as you expect.

Firecalc, google it , best retirement calculator out there, 4% is the SWR , shows success or fail rates from 1871. Age pension needs to be added on top. no one knows the future returns or inflation rates but this shows what would have worked historically.

Expenses (you need to work this out for yourself everyone is different) * 25 thats your number.

Do you mean $350,000? paragraph 5

For example, a very achievable lump sum of $35,000 can deliver a couple a retirement income of more than $31,000 a year

Hi Jennifer

Thanks for your email. The figure is correct because a couple with $35,000 in super are entitled to the full Age Pension for a couple which is close to $30,000 a year.

Regards

Trish

Hi Trish,

The number of couples retiring $1 million in Australia is relatively small. Also people are tending to work longer and past 65. I will be useful to have tables similar to table 1 & 2, for couples and singles retiring with, $500,000, $600,000, $700,000, $800,000 & $900,000. and retiring past 65 say 66, 67, 68, 69 & 70. Thanks & Best Regards Jerome

Hi Jerome

Thanks for your feedback. We hope to create those extra lump sum tables in the near future. You may also find the following articles useful (which deal with the lump sums that you mention, but from the target income point of view):

https://www.superguide.com.au/superannuation-basics/setting-retirement-living-on-more-than-55000-a-year

https://www.superguide.com.au/superannuation-basics/a-comfortable-retirement-how-much-super-is-enough

Regards

Trish

Just a question:

===============

A $1 million retirement :

why the Annual income (indexed) when retire , for a couple is more than a single person, assume they get the same return on saving, and retire at the same age?

For example:

For 5 % return, age 55 and live till age 87:

single get $46,500, while couple get $55,000.

In both cases, they both have $1 million at retirement @55, both live till age 87 and have same return.

Hi Albert

Thanks for your email. A couple are entitled to a greater part Age Pension for the same level of assets which means they need a smaller lump sum on retirement, when combined with Age Pension entitlements. In many cases the part Age Pension doesn’t kick in until a few years in retirement. Within the text, I explain when the Age Pension entitlements are available for the different scenarios.

Regards

Trish

How can you get a part age pension if you have assets (Super of 1million) over the assets test threshold which is currently under $1 million.? A home owning couple would have other non cash/super assets also, like contents, car etc tipping them well over.

*** If you retire today, at the age of 65 with $1 million in super, as a couple, your savings can deliver you:

a retirement income of $76,000(indexed) a year until the age of 87 (which includes a part Age Pension from the age of 66)

$62,500 (indexed) a year until the age of 100 (which includes a healthy part Age Pension from the age of 66).

Hi Glenn

Thanks for your comments and question. If you read the assumptions that are included the article, you will find your answer. We assume a couple have $25,000 in assets plus own home. Whatever scenario we use, we will have readers writing in that it is not accurate, or not representative so we keep the scenarios as simple as possible.

We publish these articles as a prompt to readers to start asking these types of questions and conduct their own research, including using the calculators.

Since the Age Pension was adjusted again this month, the income figures will be slightly higher again for those receiving a part Age Pension. Our articles cannot be relied upon as advice – they serve as a pointer for our readers to conduct their own investigations.

Regards

Trish

Tahnks. Interesting articles. With the present trend of working life (75). What’s the advice.

Re my previous message …

I have re-checked my calcs with a couple of different on-line calculators and I can now see that it is possible to get an income between $50K and $55K, when you add in the Age Pension.

Perhaps the most interesting aspect of these calculations, is how little a retirement benefit much greater than $480K really buys you in terms of an annual income. Suppose you retire with $750K – 3/4 of a million (wow!). Then your annual Age Pension drops from nearly $20K to well under $10K and a significant proportion of your retirement benefit simply gets devoted to making up this shortfall.

It would be really interesting to see a spreadsheet, showing the tradeoffs between throwing more money into Super (to increase the retirement benefit) and hence potential income and (on the other hand) saving less in super but getting a larger Age Pension.

Regards

Paul

Can you please expain to me how the million dollar super ever runs out. My thoughts are if you have a million dollars in Super and it returns 7% then you acquire $70,000 a year , this is just spending what your fund earns not the one million dollars as aprinciple sum, so why does it ever run out.