Since 1 July 2017 there has been a $1.6 million limit on the amount you can transfer into a super account in pension phase. The question is, is this an arbitrary figure dreamed up by bureaucrats or is it enough for a dream retirement?
The $1.6 million balance transfer 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 cap is currently set at $1.6 million but will be indexed for inflation in $100,000 increments. You can read more in SuperGuide article Definitive guide to the $1.6 million transfer balance cap.
Using MoneySmart’s Retirement Planner we have calculated how much income $1.6 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 $1 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). 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.
As you will see, depending on how long you want your money to last and the rate of return you earn on your super investments, $1.6 million does not necessarily deliver the champagne lifestyle you might expect.
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.
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.
Income generated from a $1.6 million retirement super balance
First let’s look at various scenarios for a couple with a combined balance of $1 million on retirement, which they transfer into a super pension account.
Couple: Retiring at 60
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $70,915 | $75,829 | $81,264 | $87,368 | $94,142 | $101,642 | $109,841 |
| No | $51,950 | $59,006 | $66,791 | $75,140 | $84,006 | $93,381 | $103,210 | |
|
90 |
Yes | $62,482 | $66,858 | $71,905 | $77,682 | $84,285 | $91,854 | $100,326 |
| No | $42,799 | $49,300 | $56,972 | $65,550 | $74,661 | $84,402 | $94,658 | |
|
95 |
Yes | $56,875 | $60,669 | $65,236 | $70,732 | $77,183 | $84,849 | $93,588 |
| No | $36,449 | $42,348 | $49,609 | $58,430 | $68,004 | $78,149 | $88,771 | |
|
100 |
Yes | $52,737 | $56,133 | $60,326 | $65,463 | $71,791 | $79,491 | $88,575 |
| No | $31,830 | $37,141 | $43,826 | $52,308 | $62,897 | $73,591 | $84,652 | |
Couple: Retiring at 65
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $83,942 | $89,354 | $95,264 | $101,652 | $108,541 | $116,032 | $123,994 |
| No | $66,191 | $73,442 | $81,171 | $89,363 | $97,959 | $106,961 | $116,352 | |
|
90 |
Yes | $70,948 | $75,829 | $81,264 | $87,368 | $94,142 | $101,642 | $109,841 |
| No | $52,245 | $59,053 | $66,735 | $75,137 | $84,006 | $93,381 | $103,210 | |
|
95 |
Yes | $62,892 | $67,015 | $71,927 | $77,682 | $84,285 | $91,854 | $100,326 |
| No | $43,220 | $49,377 | $56,731 | $65,288 | $74,617 | $84,402 | $94,658 | |
|
100 |
Yes | $57,372 | $61,079 | $65,465 | $70,753 | $77,183 | $84,849 | $93,588 |
| No | $36,974 | $42,456 | $49,197 | $57,500 | $67,578 | $78,129 | $88,771 | |
Couple: Retiring at 66
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $87,419 | $92,850 | $98,862 | $105,331 | $112,295 | $119,750 | $127,673 |
| No | $69,938 | $77,181 | $84,939 | $93,088 | $101,642 | $110,559 | $119,839 | |
|
90 |
Yes | $73,168 | $78,052 | $83,568 | $89,751 | $96,562 | $104,040 | $112,250 |
| No | $54,647 | $61,464 | $69,149 | $77,524 | $86,347 | $95,644 | $105,372 | |
|
95 |
Yes | $64,433 | $68,631 | $73,534 | $79,382 | $86,050 | $93,551 | $101,961 |
| No | $44,876 | $51,072 | $58,388 | $66,925 | $76,238 | $85,952 | $96,134 | |
|
100 |
Yes | $58,484 | $62,266 | $66,659 | $71,974 | $78,460 | $86,060 | $94,750 |
| No | $38,207 | $43,706 | $50,440 | $58,691 | $68,679 | $79,250 | $89,841 | |
Couple: Retiring at 67
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $91,239 | $96,853 | $102,933 | $109,443 | $116,418 | $123,858 | $131,748 |
| No | $74,029 | $81,343 | $89,051 | $97,194 | $105,688 | $114,538 | $123,709 | |
|
90 |
Yes | $75,452 | $80,521 | $86,117 | $92,352 | $99,206 | $106,664 | $114,778 |
| No | $57,169 | $64,077 | $71,799 | $80,111 | $88,864 | $98,101 | $107,755 | |
|
95 |
Yes | $65,876 | $70,211 | $75,285 | $81,170 | $87,851 | $95,373 | $103,735 |
| No | $46,579 | $52,850 | $60,279 | $68,782 | $78,012 | $87,572 | $97,659 | |
|
100 |
Yes | $59,486 | $63,364 | $67,862 | $73,271 | $79,824 | $87,368 | $96,025 |
| No | $39,445 | $45,024 | $51,808 | $60,078 | $70,021 | $80,418 | $90,924 | |
Couple: Retiring at 68
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $95,593 | $101,309 | $107,438 | $113,968 | $121,029 | $128,417 | $136,301 |
| No | $78,555 | $85,952 | $93,661 | $101,759 | $110,198 | $117,551 | $128,056 | |
|
90 |
Yes | $77,962 | $83,164 | $88,917 | $95,155 | $102,045 | $109,548 | $117,550 |
| No | $59,920 | $66,931 | $74,670 | $82,930 | $91,644 | $100,779 | $110,350 | |
|
95 |
Yes | $67,456 | $71,873 | $77,082 | $83,055 | $89,767 | $97,348 | $105,650 |
| No | $48,407 | $54,792 | $62,264 | $70,756 | $79,842 | $89,363 | $99,361 | |
|
100 |
Yes | $60,582 | $64,518 | $69,125 | $74,654 | $81,170 | $88,770 | $97,367 |
| No | $40,760 | $46,414 | $53,254 | $61,542 | $71,425 | $81,656 | $92,046 | |
Couple: Retiring at 70
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $105,854 | $111,824 | $118,173 | $124,777 | $131,863 | $139,250 | $147,078 |
| No | $89,516 | $96,869 | $104,604 | $112,568 | $120,948 | $129,558 | $138,451 | |
|
90 |
Yes | $83,942 | $89,354 | $95,264 | $101,652 | $108,541 | $116,032 | $123,994 |
| No | $66,260 | $73,447 | $81,171 | $89,363 | $97,959 | $106,961 | $116,352 | |
|
95 |
Yes | $71,105 | $75,858 | $81,264 | $87,368 | $94,142 | $101,642 | $109,841 |
| No | $52,519 | $59,079 | $66,669 | $75,093 | $84,006 | $93,381 | $103,210 | |
|
100 |
Yes | $63,067 | $67,165 | $71,955 | $77,683 | $84,285 | $91,854 | $100,326 |
| No | $43,677 | $49,474 | $56,406 | $64,707 | $74,463 | $84,377 | $94,658 | |
Couple: Retiring at 75
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $148,978 | $155,403 | $162,118 | $168,951 | $176,154 | $183,552 | $191,183 |
| No | $134,218 | $141,651 | $149,292 | $157,124 | $165,145 | $173,346 | $181,716 | |
|
90 |
Yes | $105,854 | $111,824 | $118,173 | $124,777 | $131,863 | $139,250 | $147,078 |
| No | $89,516 | $96,869 | $104,604 | $112,568 | $120,948 | $129,558 | $138,451 | |
|
95 |
Yes | $83,951 | $89,354 | $95,264 | $101,652 | $108,541 | $116,032 | $123,994 |
| No | $66,561 | $73,483 | $81,154 | $89,371 | $97,959 | $106,961 | $116,352 | |
|
100 |
Yes | $71,613 | $76,102 | $81,366 | $87,367 | $94,142 | $101,642 | $109,841 |
| No | $53,143 | $59,216 | $66,272 | $74,449 | $83,725 | $93,371 | $103,210 | |
The following scenarios are for a single person with a retirement super balance of $1.6 million which they transfer into a super pension account.
Single: Retiring at 60
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $59,946 | $65,693 | $72,160 | $79,442 | $86,552 | $96,019 | $105,261 |
| No | $51,951 | $58,966 | $66,793 | $75,139 | $83,954 | $93,355 | $103,164 | |
|
90 |
Yes | $51,401 | $56,371 | $62,518 | $69,695 | $77,753 | $86,687 | $96,350 |
| No | $42,798 | $49,300 | $56,973 | $65,549 | $74,677 | $84,403 | $94,653 | |
|
95 |
Yes | $45,957 | $50,196 | $55,639 | $62,630 | $70,853 | $80,063 | $90,154 |
| No | $36,448 | $42,348 | $49,613 | $58,431 | $68,060 | $78,149 | $88,813 | |
|
100 |
Yes | $42,171 | $45,828 | $50,649 | $57,174 | $65,593 | $75,228 | $85,702 |
| No | $31,841 | $37,140 | $43,826 | $52,303 | $62,901 | $73,596 | $84,653 | |
Single: Retiring at 65
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $73,592 | $79,780 | $86,519 | $93,809 | $101,659 | $109,972 | $118,849 |
| No | $66,191 | $73,403 | $81,158 | $89,374 | $97,967 | $106,964 | $116,352 | |
|
90 |
Yes | $60,323 | $65,781 | $72,218 | $79,442 | $87,358 | $96,019 | $105,261 |
| No | $52,263 | $59,053 | $66,730 | $75,088 | $83,954 | $93,355 | $103,164 | |
|
95 |
Yes | $52,152 | $56,794 | $62,603 | $69,651 | $77,753 | $86,687 | $96,350 |
| No | $43,220 | $49,378 | $56,731 | $65,295 | $74,663 | $84,403 | $94,653 | |
|
100 |
Yes | $46,773 | $50,776 | $55,839 | $62,470 | $70,723 | $80,063 | $90,154 |
| No | $36,975 | $42,462 | $49,197 | $57,491 | $67,577 | $78,139 | $88,813 | |
Single: Retiring at 66
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $77,162 | $83,428 | $90,253 | $97,555 | $105,352 | $113,665 | $122,374 |
| No | $69,939 | $77,188 | $84,939 | $93,073 | $101,584 | $110,550 | $119,842 | |
|
90 |
Yes | $62,641 | $68,156 | $74,585 | $81,856 | $89,807 | $98,354 | $107,522 |
| No | $54,653 | $61,463 | $69,150 | $77,522 | $86,347 | $95,643 | $105,353 | |
|
95 |
Yes | $53,663 | $58,400 | $64,268 | $71,337 | $79,443 | $88,302 | $97,846 |
| No | $44,877 | $51,072 | $58,398 | $66,924 | $76,224 | $85,953 | $96,129 | |
|
100 |
Yes | $47,936 | $51,971 | $57,091 | $63,657 | $71,928 | $81,252 | $91,246 |
| No | $38,206 | $43,713 | $50,435 | $58,691 | $68,679 | $79,230 | $89,844 | |
Single: Retiring at 67
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $81,135 | $87,479 | $94,352 | $101,659 | $109,450 | $117,724 | $126,386 |
| No | $74,029 | $81,343 | $89,061 | $97,176 | $105,687 | $114,538 | $123,712 | |
|
90 |
Yes | $64,961 | $70,682 | $77,197 | $84,455 | $92,373 | $100,853 | $109,957 |
| No | $57,170 | $64,093 | $71,799 | $80,063 | $88,863 | $98,058 | $107,754 | |
|
95 |
Yes | $55,162 | $60,080 | $66,004 | $73,135 | $81,225 | $90,029 | $99,516 |
| No | $46,558 | $52,867 | $60,260 | $68,784 | $78,011 | $87,584 | $97,676 | |
|
100 |
Yes | $49,004 | $53,132 | $58,374 | $65,027 | $73,270 | $82,464 | $92,373 |
| No | $39,445 | $45,024 | $51,808 | $60,077 | $70,016 | $80,419 | $90,884 | |
Single: Retiring at 68
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $85,564 | $92,042 | $98,926 | $106,216 | $113,984 | $122,227 | $130,763 |
| No | $78,574 | $85,953 | $93,650 | $101,759 | $110,202 | $118,970 | $128,058 | |
|
90 |
Yes | $67,523 | $73,385 | $80,029 | $87,333 | $95,169 | $103,665 | $112,651 |
| No | $59,920 | $66,923 | $74,669 | $82,932 | $91,644 | $100,780 | $110,351 | |
|
95 |
Yes | $56,842 | $61,855 | $67,898 | $75,130 | $83,149 | $91,856 | $101,263 |
| No | $48,407 | $54,772 | $62,264 | $70,760 | $79,851 | $89,354 | $99,365 | |
|
100 |
Yes | $50,171 | $54,430 | $59,740 | $66,477 | $74,652 | $83,807 | $93,624 |
| No | $40,761 | $46,414 | $53,247 | $61,542 | $71,427 | $81,623 | $92,070 | |
Single: Retiring at 70
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $96,226 | $102,749 | $109,759 | $117,131 | $124,892 | $132,951 | $141,371 |
| No | $89,519 | $96,872 | $104,604 | $112,623 | $120,948 | $129,555 | $138,452 | |
|
90 |
Yes | $73,582 | $79,780 | $86,519 | $93,809 | $101,659 | $109,972 | $118,849 |
| No | $66,261 | $73,447 | $81,158 | $89,374 | $97,967 | $106,964 | $116,352 | |
|
95 |
Yes | $60,561 | $65,885 | $72,226 | $79,442 | $86,552 | $96,019 | $105,261 |
| No | $52,521 | $59,072 | $66,631 | $75,079 | $83,954 | $93,355 | $103,164 | |
|
100 |
Yes | $52,773 | $57,234 | $62,761 | $69,586 | $77,762 | $86,687 | $96,350 |
| No | $43,678 | $49,474 | $56,406 | $64,705 | $74,463 | $84,420 | $94,653 | |
Single: Retiring at 75
|
Money lasting until age |
Eligible for Age Pension? |
Return on savings |
||||||
|---|---|---|---|---|---|---|---|---|
|
2% |
3% |
4% |
5% |
6% |
7% |
8% |
||
|
85 |
Yes | $140,053 | $147,010 | $154,076 | $161,529 | $169,153 | $176,964 | $184,989 |
| No | $134,168 | $141,653 | $149,275 | $157,124 | $165,145 | $173,346 | $181,718 | |
|
90 |
Yes | $96,226 | $102,749 | $109,759 | $117,131 | $124,892 | $132,951 | $141,371 |
| No | $89,519 | $96,872 | $104,604 | $112,623 | $120,948 | $129,555 | $138,452 | |
|
95 |
Yes | $73,864 | $79,840 | $86,502 | $93,809 | $101,659 | $109,972 | $118,849 |
| No | $66,561 | $73,472 | $81,154 | $89,372 | $97,967 | $106,964 | $116,352 | |
|
100 |
Yes | $61,663 | $66,560 | $72,430 | $79,327 | $87,376 | $96,019 | $105,261 |
| No | $53,145 | $59,216 | $66,272 | $74,460 | $83,740 | $93,358 | $103,164 | |
Assumptions
Compare super funds
- 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
Want to plan your retirement but not sure where to begin?
Become a SuperGuide Premium member and access independent expert guidance on how to plan your retirement, including how much super you need, how long you are likely to live for, whether you could be eligible for the Age Pension, the implications of retiring at different ages, how to prepare for retirement and much more.
Includes performance rankings for 226 super funds and 159 pension funds, more than 500 articles, how-to guides, checklists, tips and strategies, calculators, case studies, quizzes and a monthly newsletter.
I have a question relating to your retirement table for $1.6M in super.
For a couple with $1.6M your table shows yes & no for pension eligibility? I do not understand how a couple with this amount in super is eligible for the pension? Can you please clarify your assumptions
Hi Ian – The assumption is that because their assets are being drawn down (ie spent) in retirement, this reduces their asset levels to such a point that they subsequently become eligible for the Age Pension. Learn more about how the Age Pension assets test works.
Best wishes
The SuperGuide team