According to the December 2022 ASFA Retirement Standard, a couple can live a ‘comfortable lifestyle’ with a retirement balance of $690,000 while singles can enjoy the same with $595,000. But these are guidelines only. Depending on your personal circumstances, you might live comfortably on less especially if you are not keen on travel or intend to continue working into your 70s.
What if your retirement balance is closer to $500,000? Using MoneySmart’s Retirement Planner we have calculated how much income $500,000 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, 67, 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 $500,000, net of fees. The return your super investments earn in retirement, net of fees, will depend on the 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 annualised average net return of 2%, 3%, 4%, 5%, 6% and 7%.
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 inflation (as measured by the Consumer Price Index) and an annual 4% rise in wages growth.
Where to go for more
We hope that the figures in the tables below will get you thinking.
Income generated from a $500,000 retirement super balance
First let’s look at the estimated annual income under various scenarios for a couple with a combined balance of $500,000 on retirement, which they transfer into a super pension account.
Couple: Retiring at 60
Money lasting until age | 2% | 3% | 4% | 5% | 6% | 7% |
---|---|---|---|---|---|---|
85 | $57,491 | $58,453 | $59,519 | $60,779 | $62,199 | $63,759 |
90 | $58,400 | $59,206 | $60,110 | $61,160 | $62,358 | $63,733 |
95 | $59,716 | $60,410 | $61,192 | $62,095 | $63,125 | $64,314 |
100 | $61,316 | $61,939 | $62,640 | $63,436 | $64,348 | $65,379 |
Couple: Retiring at 65
Money lasting until age | 2% | 3% | 4% | 5% | 6% | 7% |
---|---|---|---|---|---|---|
85 | $67,485 | $69,278 | $71,211 | $73,260 | $75,426 | $77,696 |
90 | $65,715 | $67,345 | $69,162 | $71,118 | $73,220 | $75,484 |
95 | $65,250 | $66,717 | $68,347 | $70,186 | $72,212 | $74,425 |
100 | $65,626 | $66,880 | $68,316 | $69,977 | $71,875 | $73,994 |
Couple: Retiring at 67
Money lasting until age | 2% | 3% | 4% | 5% | 6% | 7% |
---|---|---|---|---|---|---|
85 | $72,375 | $74,518 | $76,777 | $79,129 | $81,585 | $84,159 |
90 | $69,022 | $70,978 | $73,121 | $75,426 | $77,871 | $80,427 |
95 | $67,578 | $69,395 | $71,397 | $73,610 | $75,962 | $78,500 |
100 | $67,318 | $68,906 | $70,751 | $72,806 | $75,077 | $77,551 |
Couple: Retiring at 70
Money lasting until age | 2% | 3% | 4% | 5% | 6% | 7% |
---|---|---|---|---|---|---|
85 | $76,101 | $78,290 | $80,572 | $82,971 | $85,439 | $87,998 |
90 | $70,699 | $72,795 | $75,007 | $77,336 | $79,792 | $82,371 |
95 | $68,277 | $70,186 | $72,282 | $74,541 | $76,951 | $79,501 |
100 | $67,369 | $69,092 | $71,048 | $73,190 | $75,519 | $78,034 |
Couple: Retiring at 75
Money lasting until age | 2% | 3% | 4% | 5% | 6% | 7% |
---|---|---|---|---|---|---|
85 | $88,210 | $90,539 | $92,868 | $95,266 | $97,714 | $100,204 |
90 | $76,101 | $78,290 | $80,572 | $82,971 | $85,439 | $87,998 |
95 | $70,699 | $72,795 | $74,990 | $77,336 | $79,792 | $82,371 |
100 | $68,262 | $70,198 | $72,282 | $74,541 | $76,951 | $79,501 |
The following scenarios are for a single person with a retirement super balance of $500,000 which they transfer into a super pension account.
Single: Retiring at 60
Money lasting until age | 2% | 3% | 4% | 5% | 6% | 7% |
---|---|---|---|---|---|---|
85 | $44,181 | $45,605 | $47,202 | $48,971 | $50,891 | $52,972 |
90 | $43,772 | $45,044 | $46,490 | $48,151 | $49,985 | $52,018 |
95 | $43,940 | $45,042 | $46,339 | $47,860 | $49,607 | $51,565 |
100 | $44,493 | $45,453 | $46,594 | $47,937 | $49,531 | $51,408 |
Single: Retiring at 65
Money lasting until age | 2% | 3% | 4% | 5% | 6% | 7% |
---|---|---|---|---|---|---|
85 | $51,085 | $52,897 | $54,752 | $56,737 | $58,808 | $60,987 |
90 | $48,496 | $50,136 | $51,905 | $53,803 | $55,831 | $57,967 |
95 | $47,288 | $48,798 | $50,459 | $52,250 | $54,202 | $56,295 |
100 | $46,943 | $48,269 | $49,790 | $51,495 | $53,371 | $55,394 |
Single: Retiring at 67
Money lasting until age | 2% | 3% | 4% | 5% | 6% | 7% |
---|---|---|---|---|---|---|
85 | $53,587 | $55,486 | $57,470 | $59,541 | $61,699 | $63,942 |
90 | $49,920 | $51,689 | $53,544 | $55,529 | $57,621 | $59,833 |
95 | $48,108 | $49,726 | $51,473 | $53,371 | $55,399 | $57,557 |
100 | $47,374 | $48,841 | $50,459 | $52,250 | $54,202 | $56,305 |
Single: Retiring at 70
Money lasting until age | 2% | 3% | 4% | 5% | 6% | 7% |
---|---|---|---|---|---|---|
85 | $57,470 | $59,369 | $61,440 | $63,554 | $65,754 | $68,020 |
90 | $51,818 | $53,630 | $55,594 | $57,621 | $59,757 | $62,001 |
95 | $49,035 | $50,740 | $52,552 | $54,493 | $56,575 | $58,765 |
100 | $47,731 | $49,273 | $50,977 | $52,832 | $54,828 | $56,969 |
Single: Retiring at 75
Money lasting until age | 2% | 3% | 4% | 5% | 6% | 7% |
---|---|---|---|---|---|---|
85 | $69,637 | $71,709 | $73,897 | $76,079 | $78,343 | $80,607 |
90 | $57,470 | $59,388 | $61,415 | $63,528 | $65,750 | $68,003 |
95 | $51,818 | $53,652 | $55,593 | $57,620 | $59,755 | $61,976 |
100 | $49,015 | $50,705 | $52,552 | $54,493 | $56,563 | $58,752 |
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