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How much can I afford to spend in retirement?

One of the biggest challenges for retirees is working out how much of their savings they can afford to spend each year.

Fear of running out of money and a reluctance to seek financial advice means many people withdraw the minimum amount required from their superannuation account-based pension.

There have been many attempts to create a simple rule of thumb to help people estimate the amount of retirement income they should aim for, although most have been developed overseas.

But what if there was a simple, easy-to-remember rule of thumb to help Australian retirees work out the ‘’Goldilocks’’ pension drawdown? That is, an amount not so great you risk running out of money and not so small you live more frugally than you need to, but an amount that is just right.

It turns out there is.

Spend your age

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Response

  1. Great article and the “Spend your decennial age” is really interesting. I am no actuary but I have been trying to come up with “rule of thumb” basis for a couple of years without much success. I have been trying to work it out from a retired couple’s point of view so would love to see any work they have done on that at some stage.

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