Is $2 million in super enough to retire on?

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Transfer balance cap
Where to go for more
Income generated from a $2 million retirement super balance

A million dollars is often cited as the gold standard of retirement savings. It certainly sounds like a lot of money, but it may not provide the income you require if you are a couple or if one of you has high healthcare needs.

So we’ve decided to test run some higher retirement balances to help guide your planning, in this case $2 million. Using MoneySmart’s Retirement Planner we have calculated how much income $2 million in super will generate under a range of scenarios including:

Whether you are single or in a couple.
The age you plan to retire. We have selected 60, which is a common goal, then 65, 66, 67, 68, 70 and 75 to show the impact of delaying retirement.
How long you want your money to last. We run the numbers for age 85, 90, 95 and 100 on the basis that the average retiree will live until their mid-80s and some will celebrate 100.
The return on your $2 million, net of fees. The return your super investments earn in retirement will depend on the type of investments you choose. A higher ratio of growth to defensive investments will result in a higher long-term return. To demonstrate the difference a few percentage points can make, we break down the annual income received for an average net return of 2%, 3%, 4%, 5%, 6%, 7% and 8%.

Note: We do not consider it realistic to achieve returns of 7% or 8% per year net of all fees, particularly over such a long time period, but we have added these as points for comparison after requests from readers.

Discover the top performing pension funds and their long-term returns

We also assume you are a homeowner and include income from a full or part Age Pension if you are eligible (this may happen as your super balance reduces over time). However, we don’t take into account income from assets you may hold outside super.

All figures are in today’s dollars (adjusted for inflation). We have assumed an annual 2.5% rise in cost of living and an additional 1.5% rise in living standards per year.

Transfer balance cap

Also keep in mind that there is a $1.6 million transfer balance cap on the amount of money you can shift into a super pension account. Excess amounts will need to remain in a super accumulation account or outside super, where earnings will be taxed. The interaction of the transfer balance cap with other income and investments can be complex, so we advise you to seek professional advice.

The $1.6 million cap applies to individuals, which means a couple could have up to $3.2 million in individual accounts. However, if a couple has one account between them in a single name, the $1.6 million limit applies.

Note: The transfer balance cap is due to be increased to $1.7 million from July 2021.

To learn more see SuperGuide’s Definitive guide to the transfer balance cap.

Where to go for more

We hope that the figures in the tables below will get you thinking.

For more information on the factors to consider when planning your retirement income needs, refer to the SuperGuide article How much super do I need to retire?

The data in these tables is a small selection of possible outcomes. To plug in your own numbers, check out SuperGuide’s Super to income Reckoner which has more than 13,000 options.

We also encourage you to try out MoneySmart’s Retirement Planner calculator with your projected super balance, retirement age, length of retirement and estimated investment returns. The calculator also allows you to enter outside savings and investments.

Disclaimer: This article is only intended to give approximate retirement income figures that $2m in super may achieve. These figures do not take into account your personal circumstances or assets and are also based on projections about future investment returns which may not be achieved. We recommend that you undertake your own additional research for your own retirement planning, and wherever possible seek independent financial advice.

Income generated from a $2 million retirement super balance

First let’s look at various scenarios for a couple with a combined balance of $2 million on retirement.

Couple: Retiring at 60

Money lasting until age	Eligible for Age Pension?	2%	3%	4%	5%	6%	7%	8%
85	Yes	$75,800	$81,736	$88,474	$96,144	$104,721	$114,171	$124,541
85	No	$59,110	$66,883	$75,861	$85,737	$88,869	$107,353	$119,183
90	Yes	$65,911	$70,794	$76,805	$84,036	$92,371	$101,959	$112,648
90	No	$48,301	$55,295	$63,620	$73,413	$84,253	$95,763	$107,971
95	Yes	$59,796	$63,878	$68,883	$75,342	$83,435	$93,108	$104,118
95	No	$41,023	$47,188	$54,771	$64,104	$75,363	$87,520	$100,213
100	Yes	$55,470	$58,939	$63,431	$69,055	$76,660	$86,414	$97,773
100	No	$35,807	$41,269	$48,083	$56,665	$67,510	$81,078	$94,583

Couple: Retiring at 65

Money lasting until age	Eligible for Age Pension?	2%	3%	4%	5%	6%	7%	8%
85	Yes	$92,015	$98,660	$105,952	$114,105	$122,817	$132,278	$142,329
85	No	$76,601	$84,902	$94,028	$103,764	$114,087	$124,892	$136,178
90	Yes	$76,610	$82,151	$88,590	$96,148	$104,721	$114,171	$124,541
90	No	$59,850	$67,311	$75,910	$85,617	$96,242	$107,353	$119,183
95	Yes	$67,236	$71,808	$77,354	$84,067	$92,301	$101,959	$112,648
95	No	$49,278	$55,819	$63,641	$72,984	$83,838	$95,742	$107,971
100	Yes	$60,970	$64,888	$69,705	$75,680	$83,393	$93,035	$104,118
100	No	$42,109	$47,830	$54,803	$63,351	$73,871	$86,743	$100,248

Couple: Retiring at 66

Money lasting until age	Eligible for Age Pension?	2%	3%	4%	5%	6%	7%	8%
85	Yes	$96,317	$98,757	$110,688	$118,737	$127,521	$136,955	$146,948
85	No	$81,088	$89,569	$98,747	$108,472	$118,749	$129,464	$140,655
90	Yes	$79,135	$84,858	$91,521	$99,162	$107,766	$117,181	$127,535
90	No	$62,612	$70,240	$78,949	$88,698	$99,172	$110,344	$122,020
95	Yes	$68,805	$73,511	$79,260	$86,182	$94,529	$104,062	$114,653
95	No	$51,169	$57,834	$65,755	$75,146	$86,030	$97,765	$109,929
100	Yes	$62,086	$66,175	$71,107	$77,154	$84,953	$94,639	$105,615
100	No	$43,496	$49,314	$56,374	$64,981	$75,515	$88,322	$101,618

Couple: Retiring at 67

Money lasting until age	Eligible for Age Pension?	2%	3%	4%	5%	6%	7%	8%
85	Yes	$101,052	$108,140	$115,704	$123,856	$132,653	$142,067	$152,037
85	No	$86,132	$94,721	$103,957	$113,688	$123,869	$134,558	$145,652
90	Yes	$81,869	$87,764	$94,648	$102,423	$111,050	$120,460	$130,762
90	No	$65,647	$73,430	$82,251	$92,023	$102,452	$113,511	$125,065
95	Yes	$70,488	$75,444	$81,305	$88,427	$96,808	$106,342	$116,872
95	No	$53,204	$60,001	$68,043	$77,521	$88,351	$99,928	$111,967
100	Yes	$63,373	$67,529	$72,512	$78,794	$86,693	$96,346	$107,206
100	No	$44,977	$50,895	$58,032	$66,699	$77,237	$89,974	$103,049

Couple: Retiring at 68

Money lasting until age	Eligible for Age Pension?	2%	3%	4%	5%	6%	7%	8%
85	Yes	$106,516	$113,669	$121,367	$129,566	$138,527	$147,899	$157,752
85	No	$91,761	$100,494	$109,747	$119,451	$129,620	$140,206	$151,200
90	Yes	$84,895	$91,041	$98,049	$105,952	$114,645	$124,068	$134,314
90	No	$68,963	$76,908	$85,836	$95,621	$105,964	$116,962	$128,451
95	Yes	$72,389	$77,481	$83,506	$90,807	$99,253	$108,760	$119,249
95	No	$55,405	$62,321	$70,475	$80,018	$90,809	$102,242	$114,183
100	Yes	$64,784	$68,994	$74,144	$80,491	$88,463	$98,087	$108,893
100	No	$46,562	$52,577	$59,801	$68,501	$79,053	$91,702	$104,573

Couple: Retiring at 70

Money lasting until age	Eligible for Age Pension?	2%	3%	4%	5%	6%	7%	8%
85	Yes	$119,497	$126,910	$134,852	$143,344	$152,151	$161,475	$171,353
85	No	$105,342	$114,183	$123,493	$133,169	$143,163	$153,659	$164,464
90	Yes	$92,015	$98,660	$105,952	$114,105	$122,817	$132,278	$142,329
90	No	$76,683	$84,932	$94,028	$103,764	$114,087	$124,892	$136,178
95	Yes	$76,753	$82,203	$88,620	$96,148	$104,721	$114,171	$124,541
95	No	$60,363	$67,563	$75,918	$85,546	$90,615	$107,353	$119,183
100	Yes	$67,887	$72,368	$77,725	$84,288	$92,374	$101,963	$112,648
100	No	$50,104	$56,297	$63,665	$72,464	$82,979	$95,407	$107,998

Couple: Retiring at 75

Money lasting until age	Eligible for Age Pension?	2%	3%	4%	5%	6%	7%	8%
85	Yes	$173,570	$181,719	$190,133	$198,994	$208,045	$217,251	$226,783
85	No	$161,304	$170,358	$179,688	$189,252	$199,058	$209,071	$219,350
90	Yes	$119,508	$126,912	$134,866	$143,355	$152,153	$161,519	$171,370
90	No	$105,476	$114,224	$123,493	$133,169	$143,163	$153,659	$164,464
95	Yes	$92,880	$99,117	$106,204	$114,082	$122,829	$132,292	$142,344
95	No	$77,621	$85,363	$94,039	$103,628	$114,069	$124,892	$136,178
100	Yes	$78,661	$83,693	$89,585	$96,512	$104,664	$114,166	$118,950
100	No	$61,783	$68,349	$75,933	$84,774	$95,022	$106,792	$119,178

The following scenarios are for a single person with a retirement super balance of $2 million.

Single: Retiring at 60

Money lasting until age	Eligible for Age Pension?	2%	3%	4%	5%	6%	7%	8%
85	Yes	$63,668	$69,846	$76,940	$85,127	$94,344	$104,452	$115,546
85	No	$55,513	$62,668	$71,071	$80,445	$90,729	$101,772	$113,445
90	Yes	$52,911	$57,818	$64,065	$71,863	$81,077	$91,651	$103,357
90	No	$44,068	$50,022	$57,319	$66,524	$77,252	$88,960	$101,470
95	Yes	$46,319	$50,165	$55,160	$61,779	$70,768	$81,916	$94,370
95	No	$36,347	$41,419	$47,757	$55,750	$66,263	$79,058	$92,652
100	Yes	$41,744	$44,944	$49,078	$54,520	$62,085	$73,262	$87,349
100	No	$31,013	$35,398	$40,899	$47,840	$56,699	$69,095	$85,555

Single: Retiring at 65

Money lasting until age	Eligible for Age Pension?	2%	3%	4%	5%	6%	7%	8%
85	Yes	$80,702	$87,350	$94,886	$103,117	$112,156	$121,974	$132,359
85	No	$73,521	$81,078	$89,556	$98,675	$108,529	$118,954	$129,934
90	Yes	$63,889	$69,414	$76,096	$84,051	$93,138	$103,253	$114,157
90	No	$55,757	$62,274	$69,977	$79,044	$89,254	$100,322	$111,968
95	Yes	$53,656	$58,091	$63,577	$70,538	$79,339	$89,918	$101,690
95	No	$44,416	$49,864	$56,508	$64,711	$74,842	$86,791	$99,582
100	Yes	$46,902	$50,485	$54,975	$60,746	$68,342	$78,660	$91,878
100	No	$36,960	$41,561	$47,219	$54,181	$62,871	$74,321	$89,446

Single: Retiring at 66

Money lasting until age	Eligible for Age Pension?	2%	3%	4%	5%	6%	7%	8%
85	Yes	$85,259	$92,066	$99,656	$108,023	$117,082	$126,657	$137,047
85	No	$78,170	$85,987	$94,504	$103,647	$113,365	$123,747	$134,609
90	Yes	$66,572	$72,305	$79,246	$87,251	$96,352	$106,419	$117,254
90	No	$58,571	$65,325	$73,207	$82,352	$92,525	$103,475	$115,015
95	Yes	$55,260	$59,884	$65,600	$72,710	$81,626	$92,151	$103,850
95	No	$46,288	$51,856	$58,640	$66,972	$77,168	$89,037	$101,705
100	Yes	$48,037	$51,721	$56,352	$62,218	$69,853	$80,350	$93,413
100	No	$38,299	$42,970	$48,716	$55,740	$64,449	$75,940	$90,888

Single: Retiring at 67

Money lasting until age	Eligible for Age Pension?	2%	3%	4%	5%	6%	7%	8%
85	Yes	$90,253	$97,251	$104,962	$113,364	$122,367	$132,050	$142,217
85	No	$83,457	$91,393	$99,884	$109,076	$118,765	$129,007	$139,721
90	Yes	$69,539	$75,499	$82,587	$90,669	$99,770	$109,852	$120,558
90	No	$61,733	$68,656	$76,687	$85,874	$96,018	$106,870	$118,264
95	Yes	$57,080	$61,841	$67,734	$75,053	$83,362	$94,549	$106,076
95	No	$48,324	$54,010	$60,919	$69,362	$79,652	$91,406	$103,922
100	Yes	$49,261	$53,085	$57,798	$63,792	$71,492	$82,034	$94,987
100	No	$39,730	$44,480	$50,307	$57,373	$66,125	$77,628	$92,385

Single: Retiring at 68

Money lasting until age	Eligible for Age Pension?	2%	3%	4%	5%	6%	7%	8%
85	Yes	$95,861	$103,027	$110,853	$119,255	$128,281	$137,854	$147,955
85	No	$89,367	$97,332	$105,902	$115,039	$124,656	$134,844	$145,454
90	Yes	$72,765	$79,017	$86,288	$94,449	$103,584	$113,540	$124,150
90	No	$65,182	$72,291	$80,474	$89,738	$99,770	$110,536	$121,837
95	Yes	$59,052	$63,951	$70,024	$77,569	$86,649	$97,051	$108,499
95	No	$50,526	$56,324	$63,354	$71,939	$82,286	$93,917	$106,266
100	Yes	$50,644	$54,524	$59,331	$65,403	$73,318	$83,758	$96,668
100	No	$41,270	$46,122	$51,995	$59,132	$67,906	$79,423	$93,954

Single: Retiring at 70

Money lasting until age	Eligible for Age Pension?	2%	3%	4%	5%	6%	7%	8%
85	Yes	$109,307	$116,787	$124,728	$133,235	$142,177	$151,623	$161,588
85	No	$103,241	$111,348	$119,974	$129,074	$138,657	$148,651	$158,990
90	Yes	$80,473	$87,195	$94,613	$102,857	$112,020	$121,838	$132,283
90	No	$73,231	$80,719	$89,084	$98,343	$108,243	$118,765	$129,867
95	Yes	$63,597	$68,929	$75,354	$83,154	$92,255	$102,598	$113,780
95	No	$55,514	$61,619	$68,885	$77,679	$88,041	$99,355	$111,477
100	Yes	$53,680	$57,820	$62,849	$69,098	$77,163	$87,572	$100,080
100	No	$44,697	$49,717	$55,733	$62,964	$71,763	$83,254	$97,267

Single: Retiring at 75

Money lasting until age	Eligible for Age Pension?	2%	3%	4%	5%	6%	7%	8%
85	Yes	$164,382	$172,352	$180,609	$189,154	$198,042	$207,349	$216,937
85	No	$159,450	$167,825	$176,539	$185,454	$194,709	$204,247	$214,079
90	Yes	$108,920	$116,199	$124,036	$132,453	$141,365	$150,853	$160,806
90	No	$102,742	$110,656	$119,145	$128,168	$137,717	$147,654	$158,106
95	Yes	$80,234	$86,267	$93,274	$101,378	$110,362	$120,162	$130,698
95	No	$72,928	$79,685	$87,448	$96,314	$106,195	$116,858	$128,055
100	Yes	$64,292	$68,918	$74,381	$81,007	$88,975	$98,863	$110,381
100	No	$56,116	$61,469	$67,740	$75,102	$83,831	$94,552	$107,151

Assumptions

You own your own home and have personal assets of $25,000 or less. These calculations do not allow any investment assets outside super. Note that the amount of investment assets you have can greatly affect the amount of Age Pension you are eligible for.
Results are in today’s dollars. Inflation costs are a 2.5% rise per year in cost of living, plus a 1.5% additional rise per year in living standards.
You retire after you reach Age Pension age.
All returns are net of fees.
Calculations for couples assume both are same age and super balance is split evenly.
We recommend you also review the assumptions that MoneySmart list below their calculator.
Calculations were made April 2021.