How to Estimate How Long My Retirement Savings Will Last ? One of the biggest concerns most Australians have as they approach retirement is,“How long will my retirement savings last?”It’s an important question and the answer depends on how much you’ve saved, how you spend, and how your investments perform over time.
In this guide, we’ll explain how to estimate how long your retirement savings will last, what factors influence it, and what you can do to make your money go further.
Why Estimating Your Retirement Savings Matters
Retirement can last 20 to 30 years or more and running out of money too soon is one of the biggest fears retirees face.
By estimating how long your savings will last, you can:
- Set a realistic annual spending plan.
- Avoid drawing down too much too quickly.
- Plan for big expenses like travel, healthcare, or home maintenance.
- Stay confident that your super and savings can support your lifestyle.
A little planning now can mean a lot less stress later.
Key Factors That Affect How Long Your Retirement Savings Will Last
Several factors determine how long your retirement money will last. The main ones are:
1. Your Starting Balance
The larger your superannuation and savings balance at retirement, the longer it can support you.
For example, someone retiring with $800,000 can generally draw a higher income than someone with $300,000, even with similar spending habits.
2. Your Annual Spending
This is the most critical factor.
If you spend $50,000 a year from a $500,000 balance, your savings could last around 10–12 years (depending on returns).
But if you spend $35,000 a year instead, they could last 15–18 years or longer.
3. Investment Returns
If your money stays invested during retirement for example, in an account-based pension it continues to earn returns.
A 4–6% annual return can significantly extend your savings lifespan compared to keeping your money in cash with minimal interest.
4. Inflation
Rising prices mean your money buys less over time.
Even low inflation (say, 3% per year) can reduce your purchasing power by half over 20 years.
That’s why your investments should ideally grow faster than inflation.
5. Age Pension Support
Once your savings fall below certain levels, you may become eligible for the Age Pension.
This can help supplement your income and stretch your super further.
How to Estimate How Long Your Retirement Savings Will Last
You can estimate this in a few simple steps.
Step 1: List Your Total Savings
Include your:
- Superannuation balance
- Other investments (shares, managed funds, term deposits)
- Cash or emergency savings
Example:
Super = $450,000
Other investments = $50,000
Total = $500,000 retirement savings
Step 2: Decide How Much You’ll Spend Each Year
Think about your regular expenses housing, food, insurance, travel, and healthcare.
Let’s say you plan to spend $40,000 per year.
Step 3: Use a Simple Formula or Calculator
A quick way to estimate is using the “4% rule.”
It suggests that withdrawing 4% of your starting balance each year (adjusted for inflation) should make your money last about 25 years.
Example:
$500,000 × 4% = $20,000 per year (for roughly 25 years).
If you plan to spend more, your savings will run down faster.
If you spend less, they’ll last longer.
You can also use online calculators, such as the Moneysmart Retirement Planner, to get a more detailed estimate based on your income, spending, and investment settings.
How the Age Pension Affects Your Estimate
Most Australians won’t rely on super alone.
As your savings decline, you may qualify for the Age Pension, which can help extend your total income.
As of 2025:
- Singles can receive up to $28,500 per year.
- Couples can receive up to $43,700 per year (combined).
This means that once your super balance drops below the government thresholds, your Age Pension can start to cover part of your expenses — stretching your savings longer than expected.
Example: Estimating How Long $500K Might Last
Let’s look at a simple example.
| Annual Spending | Estimated Years Your Savings May Last |
|---|---|
| $30,000 per year | Around 18–20 years |
| $40,000 per year | Around 13–15 years |
| $50,000 per year | Around 10–12 years |
Assuming 4% real return (after inflation) and no Age Pension support until later years.
If you add partial Age Pension support from age 67, your savings could potentially last well into your late 80s or early 90s.
Tips to Make Your Retirement Savings Last Longer
- Start an Account-Based Pension:
Keeps your money invested while providing regular income. - Adjust Withdrawals:
Only withdraw what you need avoid taking large lump sums unless necessary. - Consider Part-Time Work or Side Income:
Even a small income can reduce how much you draw from super each year. - Review Investments Annually:
Stay balanced between growth (for returns) and conservative (for stability) options. - Plan for Healthcare and Inflation:
Medical and living costs often rise with age include them in your plan. - Seek Professional Advice:
A financial adviser can help create a strategy that matches your lifestyle goals and keeps your income sustainable.
FAQs: How to Estimate How Long My Retirement Savings Will Last
1. How can I calculate how long my super will last?
Use your total super balance, annual spending, and expected investment returns. Online calculators like Moneysmart’s Retirement Planner can help you estimate based on real data.
2. What is the 4% rule?
It’s a guideline suggesting you can withdraw 4% of your retirement savings annually and expect your money to last around 25 years.
3. Does the Age Pension affect my savings plan?
Yes. As your super reduces, the Age Pension can provide additional income, helping your money last longer.
4. How often should I review my retirement plan?
At least once a year. Review spending, returns, and life changes to stay on track.
5. Can I run out of money in retirement?
It’s possible if spending or investment losses are too high. That’s why planning, budgeting, and ongoing reviews are essential.
Knowing how to estimate how long your retirement savings will last helps you plan a more secure and confident future.
Your money can stretch further when you combine smart withdrawals, steady investment returns, and Age Pension support.
At Wealthlab, we help Australians forecast their retirement income and create strategies that make their money last for as long as they do.
Book a free consultation today to find out how to make your retirement savings work smarter for you.