Over the years, we receive many requests from readers seeking the magic lump sum amount needed to finance a worry-free lifestyle in retirement. In the many articles we publish, and update, on the topic, we assume certain rates of return, different retirement ages, different life expectancies, and in most cases, we assume a PART Age Pension.
Our very popular $1 million retirement articles have prompted us to create the SuperGuide Retirement Reckoner for couples and singles.
The SuperGuide Retirement Reckoner is not a calculator, rather, we have produced the calculations for you, by using the ASIC MoneySmart Retirement Planner. Note that we do not use the calculator’s default assumptions: instead, we use our own tailored assumptions (which are outlined in the articles listed at the end of this article).
The SuperGuide Retirement Reckoner allows you to discover what $1 million in retirement can deliver you in an indexed annual income over retirement (including PART Age Pension).
You can change scenarios, such as retiring at age 56, 61, 65, 67 or age 70. You can opt to have the money last until age 87 or age 100, and you can assume your retirement money is generating investment returns of 2%, 3%, 5% or 7%.
Note: The figures in the SuperGuide Retirement Reckoner assume you can access your super benefits, that is you have reached your preservation age, and if you’re under the age of 65, that you have also retired from the workforce. If you were born after June 1964, you cannot access your super benefits until you turn 60 years of age (your preservation age). If you’re planning to rely on your super benefits when you retire, age 56 is the current minimum age at which you can access super (preservation age) if born before July 1961, and is moving to age 57 from July 2017, for those born from 1 July 1961 until 30 June 1962, and eventually moving to age 60 for those born on or after 1 July 1964 (for more information see SuperGuide article Accessing super: What is my preservation age?).
We will continue to publish, and update, the $1 million retirement articles, and similar retirement planning articles (see list at end of this article), and the SuperGuide Retirement Reckoner serves as a supporting resource to these articles.
Over time, we will further develop the SuperGuide Retirement Reckoner to reflect even more retirement ages, other retirement balances, and potentially other investment return scenarios.
Using the SuperGuide Retirement Reckoner
The link for the SuperGuide Retirement Reckoner appears later in the article, and you can use the tool in two main ways.
The SuperGuide Retirement Reckoner lists all of the $1 million retirement scenarios in a table, which you can refer to, OR, you can tick the following variables, to list the outcomes of interest to you, such as:
- Single or Couple (this is important for discovering your PART Age Pension entitlement)
- Retirement age: age 56, 61, 65, 67 or 70
- Return on savings: 2%, 3%, 5% or 7%
- Money lasts until: 87 or 100
For example, if you want to know what $1 million at retirement can deliver you as a couple when retiring at age 67, with a return of 5% and lasting until the age of 100, this is the table that will appear (once you click couple, 67, 5%, 100):
Note: Part AP stands for PART Age Pension
If you want to compare this amount with what you would receive if your money was invested at 2% rather than 5%, then you can click the 2% return on savings box as well, and you will get this table below:
Note: Part AP stands for PART Age Pension
From this short example, you can see that the level of investment return during retirement has had a big impact on the annual retirement income (indexed) over the 33-year retirement, resulting in just over $9,000 (indexed) a year less in retirement income over the 33-year period.
You can check out the SuperGuide Retirement Reckoner by clicking on this link: SuperGuide Retirement Reckoner.
We have also included a link to the SuperGuide Retirement Reckoner in the following SuperGuide articles (which explain the annual retirement income amounts sourced from $1 million, in more detail):
- Low yields: A $1 million retirement on 3% or 2% returns
- Crunching the numbers: a $1 million retirement (7% and 5% returns)
Note: The assumptions we used when calculating the annual retirement incomes are contained at the end of the two SuperGuide articles listed above.