Most retirees aim for a comfortable retirement income – enough money to do the things you want now that you (finally) have the time to do them, without needing to watch every dollar!
But, what is a comfortable retirement income and what does it get you?
What is a Comfortable Retirement Income in Australia?
A comfortable retirement income in Australia is defined as:
Accounting for daily essentials, such as groceries, transport and home repairs, as well as private health insurance, a range of exercise and leisure activities and the occasional restaurant meal. Importantly it enables retirees to remain connected to family and friends virtually – through technology, and in person with an annual domestic trip and an international trip once every seven years.
– Association of Superannuation Funds of Australia (ASFA)
A comfortable retirement income differs from a modest retirement income in that a modest retirement income only provides for a standard of living slightly above the Age Pension.
The actual level of income to achieve a comfortable retirement income in Australia depends on whether you are single or a couple.
Comfortable Retirement Income For A Single Australian
A comfortable retirement income in Australia for a single person retiring at age 65 has been calculated by ASFA as being $50,207.02 per year.
This is the amount required, after-tax, to cover the expenses associated with a comfortable retirement.
Comfortable Retirement Income For An Australian Couple
A comfortable retirement income in Australia for a couple retiring at age 65 has been calculated by ASFA as being $70,806.43 per year, combined.
This is less than double of the income required for a single person, as many of the expenses are shared.
How Much Do I Need for a Comfortable Retirement?
The amount you need for a comfortable retirement lifestyle and to cover the expenses noted above is as follows:
|Super Balance Required At Retirement
|Comfortable Lifestyle (couple)
|Comfortable Lifestyle (single)
These amounts, invested and earning an average of 6% p.a. would be expected to cover a comfortable lifestyle until at least your statistical life expectancy.
How Do I Get a Comfortable Retirement Income?
There are a number of ways to achieve a comfortable retirement income. But, the most common way is to use your superannuation to commence a retirement income stream.
The benefit of a superannuation pension is that it provides tax-free income from age 60 and all investment earnings received within the account are received completely tax-free.
If you would like to achieve a comfortable retirement, our financial planning firm, Toro Wealth, specialises solely in helping 50 to 70 year-olds optimise their financial position in the lead up to retirement. If you’re interested in learning more about our service and cost, click here.
Frequently Asked Questions
Listed below are some frequently asked questions around a comfortable retirement income.
What is a Good Monthly Retirement Income in Australia?
A good monthly retirement income in Australia is around $4,185 per month for a single person and $5,900 per month for a couple, combined.
These amounts are based on the annual comfortable retirement income amounts calculated by ASFA.
How Much Do I Need to Retire on $100,000 a Year in Retirement?
The amount you need to retire on $100,000 a year in retirement is based on whether you are single or a couple (for Centrelink Age Pension purposes) and how long you would like to receive the $100,000 retirement income for.
The table below gives you an idea of the amount of money required to achieve an income of $100,000 per year, increasing with inflation:
|Retire at 60
|Retire at 65
|Retire at 60
|Retire at 65
|Money Lasts 20 years
|Money Lasts 30 years
|Money Lasts 40 years
Is $1 Million Enough to Retire in Australia?
$1 million is enough to retire on in Australia regardless of whether you are single or a member of a couple, or even how long you expect the $1 million to last.
The actual income you can receive each year will depend on how you choose to invest this $1 million and whether or not you are eligible for Centrelink Age Pension payments.
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