Most Australians approaching retirement ask the same question in different words: how much can I live on? ASIC’s MoneySmart retirement planner is a useful starting point for today’s entitlements. What it does not show is how your income might change over 25–30 years as super falls, deeming shifts, and part-pensions appear — or whether your spending would have survived real historical crashes.
Three income layers
1. Age Pension (if eligible) — tested on assets and income, often rising as super draws down.
2. Super drawdown — account-based pension, subject to minimum drawdown rates by age.
3. Other assets or work — part-time income, rental property, cash outside super.
Planning tools that ignore the interaction between layers 1 and 2 can overstate or understate what is sustainable.
Example mindset: A couple with $600,000 in super at 67 might target $70,000 a year total household spending. Early years might be mostly super; later years might include a growing part-pension. The order of investment returns matters as much as the average.
Why “4%” or “$X per year” is incomplete
Rules of thumb do not know your fees, asset mix, partner’s age, or whether you are a homeowner. They also treat returns as smooth. Australian retirees face sequence-of-returns risk: a downturn in the first five years of drawdowns does more damage than the same downturn later. Our guides on sequence risk and safe withdrawal rates go deeper.
What to model before you decide
- Spending in today’s dollars (essential vs discretionary)
- Whether you need income to last to 90, 95, or beyond for a couple
- Age Pension under assets and income tests each year
- Stress against real historical periods (1928 onward), not only average returns
Run your retirement income scenario
Start with the Basic calculator for a first sustainable-income estimate, then open Advanced to see historical worst, median, and best outcomes with Age Pension rules applied year by year.
Run the Basic Retirement Calculator Stress-test in the Advanced Retirement Calculator