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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 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.
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% rise in cost of living and an additional 1.2% rise in living standards per year.
Transfer balance cap
From 1 July 2017 there is a $1.6 million cap on the amount of super you can transfer into account-based pensions in retirement. The tables below assume that any retirement balance above $1.6 million remains in your super accumulation account, with the same fees and returns that applied prior to retirement.
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.
For all the details, see SuperGuide’s Retirement Phase: A super guide to the $1.6m transfer balance cap.
Where to go for more
We hope that the figures in the tables below will get you thinking. 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 nearly 9,000 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.
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? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $80,052 | $86,759 | $94,300 | $102,721 | $112,088 | $122,362 | $133,432 |
| No | $64,935 | $73,758 | $83,469 | $93,869 | $105,011 | $116,725 | $128,983 | |
|
90 |
Yes | $69,446 | $75,260 | $82,340 | $90,533 | $99,855 | $110,449 | $121,959 |
| No | $53,492 | $61,620 | $71,218 | $81,937 | $93,351 | $105,515 | $118,285 | |
|
95 |
Yes | $62,611 | $67,565 | $73,842 | $81,763 | $91,162 | $101,956 | $114,004 |
| No | $45,560 | $52,935 | $62,020 | $73,034 | $85,014 | $97,668 | $111,040 | |
|
100 |
Yes | $57,848 | $62,244 | $67,734 | $75,063 | $84,427 | $95,651 | $108,182 |
| No | $39,801 | $46,427 | $54,781 | $65,375 | $78,622 | $91,951 | $105,789 | |
Couple: Retiring at 65
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $96,820 | $104,114 | $112,053 | $120,687 | $130,029 | $140,053 | $150,664 |
| No | $82,737 | $91,790 | $101,489 | $111,725 | $122,459 | $133,724 | $145,442 | |
|
90 |
Yes | $80,365 | $86,830 | $94,300 | $102,721 | $112,088 | $122,362 | $133,432 |
| No | $65,334 | $73,816 | $83,415 | $93,880 | $105,011 | $116,725 | $128,983 | |
|
95 |
Yes | $70,299 | $75,776 | $82,454 | $90,514 | $99,855 | $110,449 | $121,959 |
| No | $54,029 | $61,716 | $70,915 | $81,616 | $93,314 | $105,515 | $118,285 | |
|
100 |
Yes | $63,579 | $68,334 | $74,141 | $81,694 | $91,115 | $101,956 | $114,004 |
| No | $46,227 | $53,077 | $61,497 | $71,880 | $84,472 | $97,645 | $111,040 | |
Couple: Retiring at 66
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $101,249 | $108,626 | $116,648 | $125,351 | $134,662 | $144,659 | $155,154 |
| No | $87,408 | $96,493 | $106,168 | $116,357 | $127,052 | $138,196 | $149,783 | |
|
90 |
Yes | $83,238 | $89,694 | $97,264 | $105,750 | $115,051 | $125,293 | $136,340 |
| No | $68,321 | $76,810 | $86,436 | $96,900 | $107,932 | $119,552 | $131,721 | |
|
95 |
Yes | $72,256 | $77,740 | $84,568 | $92,653 | $102,041 | $112,522 | $123,955 |
| No | $56,100 | $63,834 | $73,025 | $83,656 | $95,313 | $107,439 | $119,964 | |
|
100 |
Yes | $64,973 | $69,802 | $75,725 | $83,269 | $92,631 | $103,452 | $115,358 |
| No | $47,760 | $54,641 | $63,050 | $73,362 | $85,838 | $99,063 | $112,281 | |
Couple: Retiring at 67
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $106,130 | $113,634 | $121,767 | $130,459 | $139,852 | $149,782 | $160,220 |
| No | $92,540 | $101,659 | $111,349 | $121,495 | $132,113 | $143,163 | $154,651 | |
|
90 |
Yes | $86,133 | $92,827 | $100,469 | $109,055 | $118,373 | $128,523 | $139,433 |
| No | $71,464 | $80,060 | $89,742 | $100,145 | $111,061 | $122,628 | $134,662 | |
|
95 |
Yes | $74,064 | $79,790 | $86,727 | $94,960 | $104,268 | $114,683 | $126,056 |
| No | $58,218 | $66,076 | $75,318 | $85,979 | $97,514 | $109,488 | $122,116 | |
|
100 |
Yes | $66,275 | $71,195 | $77,273 | $84,890 | $94,316 | $105,065 | $116,879 |
| No | $49,294 | $56,277 | $64,751 | $75,100 | $87,526 | $100,519 | $113,652 | |
Couple: Retiring at 68
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $111,559 | $119,254 | $127,370 | $136,240 | $145,560 | $155,385 | $165,806 |
| No | $98,250 | $107,441 | $117,086 | $127,208 | $137,752 | $148,670 | $160,067 | |
|
90 |
Yes | $89,301 | $96,213 | $104,013 | $112,557 | $121,899 | $132,022 | $142,850 |
| No | $74,865 | $83,667 | $93,332 | $103,655 | $114,553 | $125,951 | $137,938 | |
|
95 |
Yes | $76,045 | $81,889 | $89,026 | $97,342 | $106,709 | $117,057 | $128,331 |
| No | $60,512 | $68,489 | $77,831 | $88,444 | $99,832 | $111,724 | $124,233 | |
|
100 |
Yes | $67,679 | $72,759 | $78,968 | $86,669 | $96,088 | $106,729 | $118,467 |
| No | $50,954 | $58,020 | $66,567 | $76,925 | $89,288 | $102,066 | $115,052 | |
Couple: Retiring at 70
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $124,684 | $132,551 | $141,017 | $149,826 | $159,130 | $168,928 | $179,063 |
| No | $111,867 | $121,123 | $130,753 | $140,775 | $151,164 | $161,953 | $173,058 | |
|
90 |
Yes | $96,828 | $104,114 | $112,053 | $120,687 | $130,029 | $140,053 | $150,664 |
| No | $82,827 | $91,808 | $101,489 | $111,725 | $122,459 | $133,724 | $145,442 | |
|
95 |
Yes | $80,633 | $86,921 | $94,306 | $102,656 | $112,088 | $122,362 | $133,432 |
| No | $65,646 | $73,864 | $83,336 | $93,893 | $105,011 | $116,725 | $128,983 | |
|
100 |
Yes | $70,892 | $76,172 | $82,593 | $90,562 | $99,855 | $110,449 | $121,959 |
| No | $54,590 | $61,842 | $70,505 | $80,885 | $93,065 | $105,523 | $118,285 | |
Couple: Retiring at 75
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $179,063 | $176,760 | $196,255 | $205,350 | $214,627 | $224,126 | $233,864 |
| No | $167,762 | $177,068 | $186,616 | $196,371 | $206,430 | $216,672 | $227,151 | |
|
90 |
Yes | $124,684 | $132,551 | $141,017 | $149,826 | $159,130 | $168,928 | $179,063 |
| No | $111,867 | $121,123 | $130,753 | $140,775 | $151,164 | $161,953 | $173,058 | |
|
95 |
Yes | $97,069 | $104,157 | $112,053 | $120,687 | $130,029 | $140,053 | $150,664 |
| No | $83,187 | $91,847 | $101,417 | $111,722 | $122,459 | $133,724 | $145,442 | |
|
100 |
Yes | $81,819 | $87,657 | $94,555 | $102,755 | $112,079 | $122,362 | $133,432 |
| No | $66,435 | $74,020 | $82,831 | $93,077 | $104,680 | $116,712 | $128,983 | |
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? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $69,093 | $75,964 | $83,996 | $93,023 | $103,051 | $113,852 | $125,419 |
| No | $61,976 | $70,058 | $79,224 | $89,284 | $100,157 | $111,738 | $123,812 | |
|
90 |
Yes | $57,303 | $63,421 | $70,950 | $79,945 | $90,261 | $101,755 | $114,066 |
| No | $49,552 | $56,672 | $65,562 | $75,965 | $87,441 | $99,764 | $112,686 | |
|
95 |
Yes | $49,732 | $54,637 | $61,162 | $69,869 | $80,617 | $92,784 | $105,973 |
| No | $41,113 | $47,301 | $55,091 | $65,238 | $77,599 | $90,951 | $104,820 | |
|
100 |
Yes | $44,566 | $48,683 | $54,031 | $61,552 | $72,277 | $85,719 | $99,959 |
| No | $35,108 | $40,467 | $47,264 | $56,030 | $68,165 | $83,818 | $98,953 | |
Single: Retiring at 65
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $86,461 | $93,873 | $102,056 | $111,006 | $120,704 | $131,044 | $141,957 |
| No | $80,254 | $88,550 | $97,561 | $107,268 | $117,649 | $128,564 | $139,992 | |
|
90 |
Yes | $68,770 | $75,362 | $83,150 | $92,123 | $102,056 | $112,915 | $124,539 |
| No | $61,699 | $69,313 | $78,202 | $88,203 | $99,066 | $110,654 | $122,833 | |
|
95 |
Yes | $57,575 | $63,000 | $69,957 | $78,603 | $88,869 | $100,434 | $112,852 |
| No | $49,574 | $56,114 | $64,184 | $74,035 | $85,718 | $98,290 | $111,350 | |
|
100 |
Yes | $50,102 | $54,597 | $60,352 | $67,985 | $78,140 | $90,806 | $104,370 |
| No | $41,308 | $46,878 | $53,782 | $62,492 | $73,911 | $88,345 | $103,158 | |
Single: Retiring at 66
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $91,076 | $98,463 | $106,651 | $115,564 | $125,177 | $135,373 | $146,171 |
| No | $84,957 | $93,272 | $102,255 | $111,901 | $122,141 | $132,909 | $144,159 | |
|
90 |
Yes | $71,669 | $78,351 | $86,160 | $95,058 | $104,859 | $115,648 | $127,108 |
| No | $64,786 | $72,404 | $81,249 | $91,156 | $101,899 | $113,250 | $125,323 | |
|
95 |
Yes | $59,520 | $65,088 | $72,018 | $80,637 | $90,828 | $102,217 | $114,454 |
| No | $51,632 | $58,269 | $66,351 | $76,150 | $87,600 | $99,969 | $112,904 | |
|
100 |
Yes | $51,159 | $56,047 | $61,853 | $69,409 | $79,449 | $91,900 | $105,437 |
| No | $42,809 | $48,399 | $55,294 | $63,985 | $75,227 | $89,416 | $104,070 | |
Single: Retiring at 67
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $96,151 | $103,705 | $111,986 | $120,936 | $130,463 | $140,581 | $151,288 |
| No | $90,309 | $98,650 | $107,637 | $117,163 | $127,360 | $138,044 | $149,182 | |
|
90 |
Yes | $74,793 | $81,683 | $89,648 | $98,527 | $108,343 | $118,959 | $130,256 |
| No | $68,065 | $75,839 | $84,769 | $94,652 | $105,274 | $116,561 | $128,451 | |
|
95 |
Yes | $61,499 | $67,222 | $74,291 | $83,051 | $93,210 | $104,532 | $116,561 |
| No | $53,789 | $60,523 | $68,740 | $78,633 | $90,004 | $102,255 | $115,052 | |
|
100 |
Yes | $52,774 | $57,464 | $63,424 | $71,061 | $81,222 | $93,553 | $106,957 |
| No | $43,964 | $50,004 | $56,971 | $65,708 | $76,976 | $91,007 | $105,519 | |
Single: Retiring at 68
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $101,843 | $109,535 | $117,849 | $126,757 | $136,292 | $146,321 | $156,852 |
| No | $96,190 | $104,559 | $113,551 | $123,136 | $133,228 | $143,751 | $154,728 | |
|
90 |
Yes | $78,233 | $85,257 | $93,326 | $102,252 | $112,033 | $122,562 | $133,736 |
| No | $71,617 | $79,577 | $88,569 | $98,351 | $108,971 | $120,136 | $131,840 | |
|
95 |
Yes | $63,643 | $69,599 | $76,841 | $85,652 | $95,754 | $106,949 | $118,959 |
| No | $56,107 | $62,996 | $71,323 | $81,284 | $92,546 | $104,653 | $117,326 | |
|
100 |
Yes | $54,227 | $59,028 | $65,083 | $72,874 | $83,024 | $95,284 | $108,551 |
| No | $45,921 | $51,716 | $58,752 | $67,520 | $78,824 | $92,681 | $107,061 | |
Single: Retiring at 70
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $115,357 | $123,305 | $131,745 | $140,629 | $149,971 | $159,920 | $170,322 |
| No | $110,052 | $118,556 | $127,585 | $137,053 | $146,962 | $157,276 | $168,037 | |
|
90 |
Yes | $86,273 | $93,572 | $101,661 | $110,654 | $120,361 | $130,723 | $141,646 |
| No | $79,953 | $88,146 | $97,150 | $106,876 | $117,276 | $128,247 | $139,653 | |
|
95 |
Yes | $68,542 | $74,852 | $82,454 | $91,293 | $101,334 | $112,348 | $124,086 |
| No | $61,345 | $68,506 | $77,069 | $87,064 | $98,050 | $109,950 | $122,333 | |
|
100 |
Yes | $57,480 | $62,517 | $68,778 | $76,783 | $86,950 | $98,952 | $111,995 |
| No | $49,539 | $55,477 | $62,618 | $71,490 | $82,799 | $96,246 | $110,353 | |
Single: Retiring at 75
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $170,777 | $179,043 | $187,619 | $196,491 | $205,768 | $215,353 | $225,070 |
| No | $166,327 | $174,955 | $183,956 | $193,165 | $202,752 | $212,598 | $222,554 | |
|
90 |
Yes | $115,056 | $122,915 | $131,320 | $140,151 | $149,557 | $159,453 | $169,814 |
| No | $109,716 | $118,066 | $127,054 | $136,519 | $146,441 | $156,782 | $167,500 | |
|
95 |
Yes | $85,744 | $92,763 | $100,718 | $109,553 | $119,234 | $129,654 | $140,753 |
| No | $79,305 | $87,023 | $95,820 | $105,506 | $115,938 | $127,038 | $138,656 | |
|
100 |
Yes | $68,483 | $74,031 | $80,759 | $88,921 | $98,651 | $109,948 | $122,284 |
| No | $61,283 | $67,569 | $74,973 | $83,878 | $94,607 | $106,930 | $120,173 | |
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.
- Inflation costs are a 2% rise per year in cost of living plus an 1.2% additional rise per year in living standards
- All returns are net of fees
- Results are in today’s dollars
- We recommend you also review the assumptions that MoneySmart list below their calculator
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