How much income do you need to retire in Australia? The ASFA Retirement Standard (February 2026 update) puts the comfortable retirement figure at $77,375 a year for a couple and $54,840 for a single person. A modest retirement costs around $52,800 for a couple and $36,700 for a single. Both assume you own your home outright and are in reasonable health.
But those are benchmark figures. Your actual number depends on where you live, whether you own or rent, what health costs you’re carrying, how much travel you want to do, and whether you’re supporting anyone else. This guide breaks down how to work out your specific retirement income number, where that income actually comes from, and how the pieces fit together.
Please note: All figures and scenarios in this article are approximate and for illustrative purposes only. Individual outcomes will vary based on personal circumstances, investment returns, fees and current government policy. This is general information, not personal advice.
The ASFA benchmarks: a starting point, not a target
The ASFA Retirement Standard is the most widely used reference for retirement income in Australia. It’s updated quarterly for spending figures, with lump sum targets revised periodically (most recently in February 2026).
For homeowners aged 67 and over in reasonable health, the current benchmarks are:
| Modest lifestyle | Comfortable lifestyle | |
|---|---|---|
| Single, per year | ~$36,700 | ~$54,840 |
| Couple, per year | ~$52,800 | ~$77,375 |
| Lump sum needed at 67 (single) | $110,000 | $630,000 |
| Lump sum needed at 67 (couple) | $120,000 | $730,000 |
Source: ASFA Retirement Standard, spending figures updated quarterly, lump sums updated February 2026. Both assume home ownership and partial Age Pension support.
A comfortable retirement covers private health insurance, a reliable car, regular domestic travel and occasional international trips, dining out, and household costs. It’s not luxury. It’s a solid, secure retirement with genuine freedom of choice.
A modest retirement covers the basics: groceries, utilities, basic health cover, local transport and simple leisure. It’s better than the Age Pension alone, but there’s limited room for extras.
The lump sum figures at the modest level ($110,000 singles, $120,000 couples) are so low because the Age Pension covers most of the income at that level. Super is just a top-up. At the comfortable level, super does the heavier lifting, with the Age Pension supplementing as the balance draws down.
Scott talked about why most people fixate on the super balance number when the income number is what actually matters in Episode 8 of the podcast. The goal isn’t to die with the largest super balance possible. It’s to convert capital into confident living.
Where your retirement income actually comes from
Most Australian retirees don’t rely on a single income source. Retirement income is typically a combination of three streams, and the mix changes over time.
Super drawdown
At retirement, your super shifts from accumulation to drawdown. The most common structure is an account-based pension, where your fund pays you a regular income while the remaining balance stays invested and (in pension phase) pays zero tax on investment earnings.
The government sets minimum drawdown rates by age. For 2025-26, the key rates are 4% if you’re under 65, 5% from 65 to 74, 6% from 75 to 79, and stepping up from there. There’s no maximum for a standard retirement phase pension, so you can draw more if you need to.
In practical terms, a $600,000 super balance at age 67 must generate at least $30,000 in pension payments that year under the 5% minimum. If your target income from super is $40,000, you’d be drawing at about 6.7%. That’s on the higher side and worth modelling carefully to make sure the balance lasts.
A quick reverse calculation: divide your target super income by your current balance. If it comes out above 6%, that’s a signal to either build the balance further, adjust the spending target, or factor in more Age Pension support.
The Age Pension
The Age Pension is the second engine of most Australian retirements, and it’s worth more than many people assume.
As of 20 March 2026, the full Age Pension pays $1,200.90 per fortnight ($31,223 per year) for singles and $1,810.40 combined per fortnight ($47,070 per year) for couples.
Source: Services Australia. These rates are set by the Australian Government and are updated each March and September.
Whether you receive a full pension, a part pension or no pension depends on the assets test and income test, with whichever produces the lower result applying. The key thresholds from 20 March 2026: a single homeowner qualifies for the full pension with assessable assets below $321,500 (couple homeowners: $481,500). The part pension cut-off is $722,000 for singles and $1,085,000 for couples.
The income test uses deeming rates rather than your actual investment returns. From March 2026, the lower deeming rate is 1.25% on the first $64,200 of financial assets for singles ($106,200 for couples), and the upper rate is 3.25% above that. Centrelink assesses your deemed income, not what you actually draw, which catches many people off guard.
Even a partial pension of $10,000 to $15,000 a year makes a meaningful difference. It reduces how much super needs to do and extends the life of your balance by years.
Phil and Dan walked through real Age Pension case studies in Episode 10 of the podcast, showing how the assets and income tests interact with real super balances. They also covered commonly missed pension opportunities in Episode 20.
Other income sources
Some retirees also draw income from investments outside super (shares, managed funds, rental properties), part-time or casual work (particularly in the first few years), or the Home Equity Access Scheme (a government loan against home equity for income top-ups).
These additional sources can fill the gap between what super and the Age Pension provide and what you actually need to spend. Part-time work in particular is increasingly common in the early retirement years (the “go-go” years) when spending tends to be highest.
How much income you need depends on when you retire
Retirement age changes the income equation significantly because it determines how many years your money needs to last and when the Age Pension kicks in.
Retiring at 60: Your super has to fund seven years of living costs before the Age Pension starts at 67. Every dollar drawn in those gap years is a dollar no longer invested and compounding. This is the hardest window to manage and where getting the income number right matters most.
Retiring at 65: Only a two-year gap before the Age Pension. Much more manageable on the same balance.
Retiring at 67: The Age Pension is available immediately (if eligible), which means super and pension work together from day one. The same super balance produces a significantly more comfortable retirement at 67 than at 60.
Scott and Phil covered the real cost of the gap years in Episode 19 of the podcast, including how retiring just one year earlier can shift your money from lasting to age 105 to running out at 79 if spending isn’t managed.
The variables that make or break your number
No retirement income estimate is better than the assumptions behind it. The variables that matter most:
Investment returns. Australian super calculators typically default to 5% to 7% a year net of fees and taxes. Adjusting by even 1% compounds over a 25-year retirement into hundreds of thousands in different outcomes. Build your base case conservatively.
Sequencing risk. If your portfolio drops 20% in year one of retirement while you’re drawing down, the damage is permanent in ways a good year later doesn’t repair. Scott and Phil explained this clearly in Episode 1 of the podcast, showing how two people with the same average return end up in completely different positions depending on when the bad years fall.
Longevity. Australians reaching 67 today have a life expectancy stretching into the mid to late 80s, with a meaningful proportion living into their 90s. A 25-year retirement isn’t worst-case thinking. It’s a realistic planning horizon.
Inflation. $50,000 a year in 2026 will buy considerably less in 2046. An account-based pension invested in a balanced or growth option helps offset this, but a fully conservative portfolio sitting in cash may not keep pace.
Home ownership. This is the single biggest variable. A homeowner removes their largest living cost from the equation. A renter with the same super faces a fundamentally different income requirement, often $20,000 to $30,000 more per year.
A worked example: couple, homeowners, $600K at 67
Here’s what the income picture looks like for a typical homeowning couple.
Super: $600,000 in an account-based pension. Drawing 5% ($30,000 per year) with an assumed 5% net return.
Age Pension: With $600,000 in assessable assets, they’re above the full pension threshold of $481,500 but well below the $1,085,000 cut-off. They would receive a meaningful part couple pension, estimated at $20,000 to $30,000 per year.
Total retirement income: approximately $50,000 to $60,000 per year in the early years, rising as the super balance draws down and the pension entitlement increases.
That’s in the range between ASFA’s modest and comfortable benchmarks for a couple. It covers the essentials, regular domestic travel, dining out occasionally, a reliable car and private health cover. It’s a good retirement for homeowners without debt.
Want to model your own numbers? Try the free Wealthlab super calculator for a quick snapshot of where your position sits.
Frequently asked questions
How much income do you need to retire comfortably in Australia?
According to the ASFA Retirement Standard (February 2026), a comfortable retirement requires about $77,375 a year for a couple and $54,840 for a single person. These figures assume you own your home and will receive partial Age Pension support. Your actual number may be higher or lower depending on your health costs, travel plans and housing situation.
How much super do I need to retire at 67?
ASFA’s February 2026 lump sum targets are $630,000 for a single homeowner and $730,000 for a couple at age 67. These assume you’ll draw down all your capital over retirement and receive a part Age Pension as the balance reduces. Many Australians retire comfortably on less, particularly if they qualify for a larger pension entitlement.
Can I retire on the Age Pension alone?
Technically yes, but it’s tight. The full single Age Pension pays about $31,223 a year (March 2026). ASFA’s modest single retirement standard is $36,700 a year. The pension alone falls short of even the modest benchmark, which is why most retirees supplement it with super drawdown.
How much income will $500,000 in super provide?
At a 5% drawdown rate, $500,000 generates $25,000 per year in super income. Combined with a part Age Pension (likely for a homeowner at this balance), total income may reach $45,000 to $55,000 depending on your other assets and household situation.
What’s a safe withdrawal rate for Australian retirees?
The commonly cited range is 4% to 5% of your balance per year for a 25 to 30 year retirement. Going above 6% starts increasing the risk of running out. The minimum drawdown rate set by the government is 4% under 65 and 5% from 65 to 74.
Does the Age Pension count as retirement income?
Yes. The Age Pension is a regular government payment that forms part of your total retirement income. It’s not an asset (so it doesn’t count in your net worth), but it reduces how much your super needs to provide. Even a partial pension of $10,000 to $15,000 per year makes a meaningful difference.
How does home ownership affect how much retirement income I need?
Significantly. A homeowner removes rent or mortgage costs from their spending, which can reduce annual income needs by $20,000 to $30,000. ASFA’s benchmarks assume home ownership. If you’re renting, the income required jumps substantially, and the same super balance supports a lower standard of living.
How often should I review my retirement income plan?
At least every two to three years, and at key milestones: when you retire, when you turn 67 (Age Pension eligibility), and again in your mid-70s as spending patterns and health costs shift. A plan built at 62 needs updating at 65, 67, and 70. For more on structuring your income in retirement, see our retirement planning page or our pension and Centrelink page.
Get your actual number
If you’re within ten years of retirement and still working from rough estimates or free calculator outputs, that’s the gap a proper income projection is designed to close. Scott, Phil and Daniel at Wealthlab map your specific super balance, pension entitlement, investment mix and spending target against realistic scenarios to give you confidence, not just a number.
If any of this has raised questions about your own situation, book a free chat with the Wealthlab team. No pressure, no jargon.