It’s the question most Australians ask sooner or later: how much do I actually need to retire? The answer depends on what kind of retirement you’re planning, whether you’re single or in a couple, how long you’re likely to live, and how the Age Pension interacts with your own savings.
There’s no single number. But there are useful benchmarks, and there’s a straightforward way to work out your own figure.
The ASFA Retirement Standard: the starting point
The Association of Superannuation Funds of Australia (ASFA) publishes quarterly benchmarks for what a “comfortable” and “modest” retirement actually costs. These are the numbers most people encounter first, and they’re a useful reality check.
For someone aged 65-84 retiring in 2026, ASFA’s most recent published figures suggest:
| Lifestyle | Single (annual spend) | Couple (annual spend) |
|---|---|---|
| Modest | ~$34,000 | ~$49,000 |
| Comfortable | ~$53,000 | ~$74,500 |
A modest lifestyle covers the basics: food, healthcare, home maintenance, occasional short domestic holidays. A comfortable lifestyle adds private health cover, a reasonable car, regular meals out, and one overseas trip every few years.
For most AGS clients, the comfortable benchmark is closer to their expectations than the modest one. High-net-worth retirees often need meaningfully more than the comfortable figure.
The lump sum you need to fund those figures
ASFA also estimates the lump sum needed at retirement (at age 67) to fund each lifestyle assuming you’re a homeowner, live to your early 90s, and draw on the Age Pension where eligible:
- Comfortable single: ~$690,000
- Comfortable couple (combined): ~$780,000
- Modest: the Age Pension does most of the work, and a small buffer of $100,000-$150,000 is often enough
The couple figure being only slightly higher than the single figure surprises many people. It’s because couples share housing costs, and both members can qualify for the couple’s Age Pension.
The rule of 25 (and why it usually overstates what you need)
The 4% rule and its shortcut, the rule of 25, are widely cited. To fund an annual spend indefinitely, aim for 25 times that spend as invested capital:
- Want to fund $80,000/year of spending? 25 × $80,000 = $2 million invested
- Want to fund $60,000/year? 25 × $60,000 = $1.5 million invested
It’s a useful anchor, but three things are worth understanding before you take the number literally.
It was built for a worst-case scenario. The 4% figure comes from the Trinity Study of US market history. It’s the drawdown rate that would have survived the worst 30-year period a retiree could have picked (the late 1960s stagflation era) with a conservative 50/50 stocks-bonds portfolio. A retiree in almost any other historical period could have safely drawn 5%, 6%, or more without running out of money. In other words, 4% is calibrated to the worst outcome, not the typical one.
It assumes a conservative portfolio and a very long retirement. The 4% number softens further if your portfolio is more growth-oriented (a 70/30 or 80/20 mix) or if your retirement horizon is shorter than 30 years. For someone retiring at 65 rather than 55, a starting drawdown rate of 5-5.5% is often reasonable on a balanced-to-growth portfolio.
It ignores the Age Pension entirely. The rule of 25 is a self-funded number. In Australia, most retirees will draw at least some Age Pension for part of retirement, and structuring your assets to preserve that entitlement usually stretches your own capital considerably further than the pure rule of 25 suggests.
So when should you use the rule of 25 at its literal 4%? Really only if you’re planning to retire early (say, mid-50s), want to preserve capital indefinitely as a legacy, and want to insure against the worst historical market outcome. For a typical Australian retiring in their mid-60s with a balanced portfolio and Age Pension eligibility, the rule of 25 usually overstates the required lump sum by a meaningful margin.
We cover the Australian adaptation in more depth in our guide to retirement drawdown strategies. For most Australians, the honest answer sits between the ASFA benchmark and the rule-of-25 figure, and often closer to the ASFA end.
How the Age Pension changes the maths
Australia’s Age Pension is means-tested, but for many retirees it becomes a partial income stream that reduces how much you need in super. As of March 2026, the maximum fortnightly Age Pension rate (including supplements) is around $30,000/year for a single and $45,000/year for a couple combined.
The assets test cut-off matters. For a homeowner couple, the current threshold above which no Age Pension is paid sits at approximately $1.05 million in assessable assets. Below that, some Age Pension is payable on a sliding scale.
The practical effect: if you retire with $600,000 in super as a couple, plus the family home, you may receive close to the full Age Pension for many years. Your effective income is your super drawdown PLUS the Age Pension, not just the drawdown. That significantly changes the “how much do I need” question.
Singles vs couples: the reality
Retiring single costs more per person than retiring as a couple. Housing, utilities, and Age Pension entitlements all favour couples. A single retiree targeting a comfortable lifestyle needs roughly 65-70% of what a couple needs, not 50%.
For separated, widowed, or never-married Australians, this reality often sits uncomfortably alongside a super balance built on couple-lifestyle assumptions. A pre-retirement review with a financial planner is the right time to model your situation as a single rather than assume the couple figures scale down neatly.
Work out your own number in three steps
The ASFA benchmarks and the rule of 25 are useful anchors, but your own number is a better guide. Here’s the practical version:
- Estimate your annual spend in today’s dollars. Look at what you’re actually spending now, subtract mortgage repayments (assume the house is paid off by retirement), subtract work-related costs, and add anything specific to retirement: travel, hobbies, healthcare, home maintenance.
- Decide how much you want to draw from your own savings vs the Age Pension. Some retirees plan to live entirely on their own capital until it runs out and then rely on the Age Pension. Others plan to structure their capital so the Age Pension supplements their income throughout retirement. The second approach usually stretches capital further.
- Work backwards to the lump sum. Take your annual spend, subtract expected Age Pension, and divide the remainder by the safe-drawdown rate (around 5-6% for a balanced retirement portfolio). That gives you a rough capital target.
For example, a couple targeting $70,000/year of spending, with $550,000 in super, sits just inside the Age Pension taper zone. On a homeowner couple’s assets test, that balance is currently worth around $40,000/year of Age Pension. Drawdown at 5.5% from $550,000 adds another $30,250. Total income lands around $70,000, matching the target.
The maths flips for larger balances. A couple with $1.05 million or more in assessable assets falls out of the Age Pension entirely, and the entire retirement income has to come from their own drawdown. To hit the same $70,000/year self-funded, they’d need around $1.27 million in capital at 5.5%. That’s the sharper end of the trade-off: past the assets test cut-off, more capital does more work, but it’s doing all the work.
What most Australians actually retire with
According to the ATO’s most recent published statistics, the median super balance at retirement (age 60-64) sits well below the ASFA comfortable figure. Many Australians will retire on a combination of super, Age Pension, and home equity that produces an income lower than they’d have chosen, but higher than they feared.
The two levers most people underuse in the decade before retirement:
- Salary sacrifice and personal deductible super contributions to lift the balance, especially in the peak-earning years between 50 and 60
- A retirement drawdown strategy that sequences withdrawals to minimise tax and maximise Age Pension entitlement, rather than defaulting to a straight-line drawdown
Both are areas where advice reliably pays for itself several times over.
Talk to us about your number
The right number for you depends on your spending patterns, your assets outside super, whether you’re single or in a couple, and how you feel about the trade-off between drawing down capital and preserving it for your beneficiaries. Our retirement planning team runs the modelling on your actual situation, not the average, so you can retire knowing the number you’re aiming for is grounded in your real life.
Book a free initial discussion to work through your figure.