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Determine how much you might need in retirement

The SASS Retirement Affordability Series has been put together so that in 3 easy steps, you can start finding answers to some key retirement questions:

  • How much do I really need to retire?
  • Am I on track to funding my retirement?
  • Do I need to reach 180 SASS points?
  • Will my SASS benefit be enough?
  • How will Centrelink assess my SASS benefit?

Step 1: Know how much you want to spend

How you can plan and budget for your ideal retirement lifestyle

In this step, we’re helping you focus on your spending patterns so you can forecast how much you’ll need to live comfortably in retirement.

In this step, you'll learn about:

  • The difference between a ‘modest’ and ‘comfortable’ retirement lifestyle, and how that fits with your current day-to-day living.
  • How to forecast your spending needs in retirement.

How much do you really need to retire?

When you retire, there can be a big change in your sense of financial security. Instead of relying on employment for your income, being financially independent in retirement means living comfortably, without any concerns about running out of money.

How much you’ll need to give you that feeling of financial freedom depends on the habits, activities and experiences that make up your planned lifestyle.

What does a ‘moderate’ or ‘comfortable’ retirement cost?

The Association of Superannuation Funds of Australia (ASFA) publishes figures every quarter, offering some guidance on achieving a moderate or comfortable retirement. The table below (current for the March 23 quarter)*, provides an outline of a modest or comfortable lifestyle, for singles and couples aged around 67.

Scroll table horizontally on mobile

  Modest lifestyle Modest lifestyle Comfortable lifestyle Comfortable lifestyle
  Single Couple Single Couple
Total per year $31,785 $45,808 $50,004 $70,482



A modest lifestyle is described as including only basic activities. A comfortable lifestyle, on the other hand, allows for a few extras such as private health insurance. A comfortable lifestyle for a couple also includes a weekly spend of $93.19 on lunches and dinners out, and $51.83 for clothing and footwear. The total annual budget for overseas travel is $1,836.64, which might allow for the occasional holiday to nearby locations, but puts destinations further afield well out of reach

Your preferred retirement lifestyle is personal to you, so these figures might seem high or low, depending on the living standard you’re used to, and what you want for your retirement. That’s why a reverse budget based on your current expenses can be a better way to get a realistic idea of your individual retirement income needs.

Calculate your current spend

Depending on how closely you keep track of your finances, you may already have a very accurate idea of what you earn and spend every month. But if you’re less clear about how much money is coming in and going out, start by calculating your net income for the year – the money you have in your pocket to spend, after tax.

Then you can work out a total for all your expenses, essentials like household bills, groceries, insurance and running a car, as well as the extras, like entertainment, clothes and big-ticket items like holidays and household needs.

Lifestyle changes could change your spending in retirement

Once you’ve worked out a budget figure, it’s time to think carefully about how lifestyle changes in retirement might affect your spending. You might find yourself spending less on the cost of commuting to work, either on petrol or public transport.

If you plan to sell your home and move to a smaller one, you’re likely to free up cash flow as well as reduce household bills and maintenance costs.

Your plans for retirement could also include choices that bump up your expenses. Taking up certain hobbies, like a regular round of golf with friends for example, comes with additional costs. You may also need to consider some larger sums in your budget for travel plans, offering financial support or giving gifts to children or grandchildren.

Ways to reduce expenses before you retire

One change you can make to significantly reduce your expenses in retirement is to clear your debts. Having your mortgage and personal borrowing paid off could make a substantial difference to your income and expenses equation. However, if you’re planning to use some of your super balance to become debt-free, this will lower your amount of super that’s invested, along with the investment returns that contribute to your retirement income.

Next, we’ll explore how the savings you expect to have at retirement could contribute to your income, as well as any Centrelink benefits you may be eligible for.

Forecasting for life in retirement

Find out how can a reverse budget help you forecast for life in retirement.

Download the worksheet

Step 2: Check if you’re on track with your savings

Take stock of where you are today

This step can help you take stock of where you are today, rather than where you need to be. This will help you make better decisions about your retirement.

In this step, you'll learn about:

  • Understand whether you need to reach 180 accrued benefit points.
  • Discover how projections can provide a reality check on your finances.
  • Go beyond super to look at how your additional assets can provide an income in retirement.

Do I need to keep working until I reach 180 points?

Depending on your retirement goals, you may not need to reach 180 accrued benefit points. The best thing to do is find out where you stand.

Having enough saved to live comfortably in retirement really depends on the kind of lifestyle you’re planning. If your future income needs are modest, reaching 180 accrued benefit points may not be essential. It will take at least 30 years of service to achieve your maximum points so it’s worth finding out whether this goal is necessary to fund your ideal retirement.

Some SASS members who have less than 180 accrued benefit points may discover their final SASS benefit goes much further than they expect – and that they can retire sooner and still enjoy a comfortable lifestyle. Others may find they need to keep working to achieve their 180 points, so they have enough income to support their lifestyle in retirement.

My retirement savings goal

Previously we looked at some simple calculations to determine your annual spend in retirement. With this figure in mind, the next step is understanding the total savings you need, to provide you with that income throughout retirement.

According to ASFA’s current retirement standard* figures, a couple will need $690,000 in savings at retirement to support a comfortable lifestyle. For a modest lifestyle, most of a person’s income will come from the Government Age Pension with $100,000 saved.

Note - these estimates are for guidance only and are based on four important assumptions:

  1. You have reached age pension age.
  2. You own your own home.
  3. You are in relatively good health.
  4. You draw down on the capital you have saved throughout your retirement.

The amount of income you’ll need in retirement, and the savings you’ll need, are unique to you and the retirement you have planned. Your version of a comfortable lifestyle and the amount you’ll spend each year may differ from the ASFA figures, so you may require a different savings goal.

Retire early or keep working?

Getting the timing right for retirement is important. Seeking help from an expert can help you decide how much longer you need (or don’t need) to work, to support the lifestyle you want. An Aware Super financial planner1 can forecast how long your money will last, based on different scenarios and options.

With clear financial goals in mind, you can make an informed decision about when to retire. Some key things to consider are:

  1. Your plan for retirement
    What’s your vision for retirement and what do you want to be doing? What activities and travel plans do you have?
  2. Your age
    At what age do you plan to retire and how many working years do you have left until then? Stopping work earlier means you’ll have less opportunity to accrue benefit points and save more for your future income. It may also mean that you need to fund your own retirement out of your savings, until you reach pension age.
  3. State of health/life expectancy
    If you have current health issues, retiring sooner might be in your best interests, if it improves your wellbeing. Health costs can often increase as you age, so remember to consider this in your financial plan for your whole retirement.
  4. Other sources of income
    You may have other sources of income available to you in addition to your SASS benefit. Taking stock of other income sources, including investments, property, savings and Centrelink income entitlements is an important part of understanding what savings you’ll need to live on in retirement.
  5. Planned big expenses
    If you’ve got some big expenses coming up (like home renovations, or buying a car), these need to be included in your plan for your retirement savings and income.
  6. Paying down debt before you retire
    Having a balance left on your mortgage, or other personal debt, can take a big chunk of your retirement savings. Planning to minimise outstanding debts before retiring can reduce the income you’ll need to cover all living expenses.

Getting the right advice

The right strategy for you very much depends on your current circumstances and how your savings will fund your retirement. It may be that you don’t yet have enough to retire and need to keep working a little longer. The best thing to do is find out where you stand.

A financial planner can help you understand your current position and how different choices may impact your future retirement income and lifestyle.

Call 1800 620 305 to book an appointment.

To find out more about making the most of your SASS scheme, you can find a free SASS seminar.


Financial advice services are provided by Aware Financial Services Australia Limited (ABN 86 003 742 756, AFSL 238430), wholly owned by Aware Super.
* Retirement standard

Forecasting how long your savings will last    

In this video, we give you a sneak peek at the process we use to help SASS members like you determine how long their money will last.

Speaker 1 [00:00:00] One of the most common questions SASS members ask us is how long will my money last? The good news is you don't have to stay in the dark. Our robust projection process can help you determine where you stand. And if you find that your projected savings are falling a bit short, it's never too late to turn things around. You'll have the information and insights you need to make informed decisions about your retirement.


[00:00:31] Let's take Sue for example. Sue is 61 and plans to retire at 63. She owns a $440,000 home and has $36,000 in the bank. Sue has an annual income of $80,000 and an estimated SAS benefit of $330,000 in retirement. She's currently contributing 5% to SAS and is below the 6% annual average she needs to maximize her benefit. Sue believes she needs an income of $40,000 a year to live comfortably in retirement. This figure will need adjusting each year to account for the rising cost of living. Let's say Sue retires at 63 and starts a pension with her SASS benefit at age 84. Sue's pension and savings will run out and the Centrelink age pension will be her only income.


[00:01:32] So what can Sue do to improve her situation? Following recommendations from her Aware super financial planner. Sue delays her retirement until age 65. Sue also increases her cess contribution to 9% and begins to salary sacrifice her contributions for the next four years. By doing this, Sue's take home income reduces by around $2,000 per year. However, her final Sass benefit will increase to $383,000 and her savings will last seven more years. Now let's look at Charlie and Ross. Charlie and Ross are aged 60 and ready to retire. They have a current combined salary of $110,000, and a combined Sass benefit of $500,000. They own a home worth $600,000, and have $10,000 in shares and $20,000 in the bank. They estimate they need a combined income of $56,000 a year to live comfortably in retirement. Our projections show that with this current plan, Charlie and Rosh will run out of their retirement savings at age 84, after which their only income will be the Centrelink age pension.


[00:03:00] Charlie and Rausch still have options. Their Aware super Financial planner suggests, that they consider working three more years and reduce their retirement income needs to $52,000 per year by delaying their retirement. Charlie and Rausch increase their final benefit to $523,000, and their income lasts well beyond their life expectancy. Seeing how long your money will last can feel daunting, but it doesn't have to be whatever your current situation. With the right help, you can put in place smart strategies to improve your prospects in retirement. And remember, the sooner you get started, the better off you'll be. Visit the Aware Super website or call us on 1800 620 305. Today.

Knowing where your retirement income will come from

This simple worksheet helps you get a clear understanding on your net asset position and provides insights on what SASS members are doing to generate income in retirement.

Download the worksheet

Step 3: Plan for your retirement savings go the distance

Make sure you’ll have enough in retirement

Whether you’re on track with your retirement savings, or feeling a little behind, it’s good to know your options.

In this step, you'll learn about:

  • Explore whether your SASS benefit will be enough in retirement.
  • Understand how Centrelink will assess your SASS benefit.
  • Discover how salary sacrificing could increase your end benefit.

Decide if your SASS benefit is enough

Now that you have a clearer idea of what you’ll be spending in retirement, how can you make sure your SASS benefit will last?
Understanding where your income comes from in retirement can help you make better decisions about your finances before you retire.

Sources of income in retirement

Let’s take a look at where your money might come from.


As a SASS member, your most recent statement will provide an estimate of the benefit you can expect to receive at retirement. Most SASS benefits are paid as a lump sum at retirement. You then have the option to roll over your lump sum into a retirement income product such as an account-based pension or annuity that will pay you regular income.

Centrelink benefits

Will you be eligible for a full or part Government Age Pension? If you have a partner, do you know what benefits might be available for you both? There are other Centrelink payments and concession cards that may also be available to you in retirement.

Other assets and investments

You may have other investments outside of super – such as a share portfolio or a managed fund – you can rely on for income in retirement. Other assets, such as your family home, won’t bring you any income unless you decide to sell and downsize.

Part-time work

Earning money isn’t the only reason for working part-time in retirement. It can also bring benefits for your physical and mental health by keeping you engaged with your social network and community. Topping up your income in the early years of retirement can help your super savings last longer.

These sources of income, the number of years you’ll spend in retirement, and inflation all make a difference to how long your finances will last.

Taking inflation into account

To maintain your lifestyle throughout retirement, you need to consider the rising cost of living. While you can’t predict future inflation rates, it’s important to make some allowance in calculating how much income you’ll need.

You also need to take into account that it’s difficult to predict how many years you’re likely to spend in retirement, but your current state of health will give a rough idea of what your life expectancy is likely to be. By choosing to retire sooner, or later, you have some control over how long your retirement will be.

Retiring at the right time for you

Retiring at the right time is key to securing your financial future. Take time to make sure the amount you’ll need to last through retirement is achievable with the retirement age you have in mind. Continuing to work part-time for a while could be a good way to bridge the gap between your current financial position and your future income needs. You can also reduce significant costs in your retirement budget by paying down as much debt as you can before stopping work.

How a financial planner can help

With access to a modelling framework that takes all these variables into account, a financial planner can tell you if there’s a gap between your lifestyle expenses, and the retirement income you’ll have to meet these costs. If a gap exists, they can help you navigate the best way forward.

Aware Super financial planners1 are experts in helping SASS members plan for financial independence in retirement. They can help you make the most of your SASS scheme, and help you prepare for the retirement you really want.

Call 1800 620 305 to book an appointment.

To find out more about making the most of your SASS scheme, you can find a free SASS seminar.


Financial advice services are provided by Aware Financial Services Australia Limited (ABN 86 003 742 756, AFSL 238430), wholly owned by Aware Super.

Salary sacrifice calculator

Could you be salary sacrificing more contributions to SASS? Use this handy calculator to discover how additional salary sacrificing could increase your final SASS benefit.

Use the SASS calculator

Understand the Centrelink rules

You might be eligible for more Centrelink benefits than you think. Watch our video to find out how Centrelink assesses your eligibility – and where your SASS benefit fits in the process.

Speaker 1 [00:00:00] When it comes to Centrelink. Many SASS members can make the mistake of assuming they don't qualify for the age pension. But that often isn't the case. Even if you don't qualify for a full age pension. You may still qualify for a part age pension, which also gives you access to a pension, concession card and a pension supplement, or you may be eligible for other benefits such as the Commonwealth Seniors Health Card. The best thing to do is find out where you stand.

[00:00:35] So how does Centrelink assess your entitlements? First. They look at your age. Your age. Pension age could be anywhere from 65 to 67 years. It all depends on your date of birth. If, like most SAS members, you're planning to retire around 61 years of age. Bear in mind that you may not be eligible to access the Centrelink age pension for some time. Next they use the assets test and income test. The test that results in the lowest rate of pension is the one that will determine your Centrelink entitlement. Bear in mind that if you are a couple, Centrelink will take into account your combined income and assets. Let's look at the assets test. The assets test takes into account most of the assets you own, including your furniture, caravan and car. It also takes into account your financial assets such as cash, term deposits, shares, investment properties, most account based pensions and managed funds. What the assets test doesn't include is your family, home, and any amount you have in the accumulation phase of super up to the age pension age pool contributing or deferred members assess your benefit will only be included in the assets test. Once you reach aged pension age.

[00:02:15] Now let's look at the income test. For financial assets such as shares. Term deposits, managed funds and most account based pensions. Centrelink will dame these investments to earn a certain rate of income. Any actual income generated from these assets will be ignored. When it comes to investment properties and salary, Centrelink will take into account the actual income you have received. Some older account based pensions. Annuity and defined benefit pensions may also be included in the income test. But the treatment of these will depend on the type of income stream they provide. Understanding the Centrelink rules can be complex, but it doesn't have to be with an aware super planner by your side. You don't need to worry about whether you've got it right, and the sooner you get started, the sooner you know where you stand. Visit the Aware Super website or call us on one 806 20305 today.

Your helpful Retirement Affordability Guide

Find all the tools and resources from the series in this helpful guide.

Where to next?

SASS seminars are a great way to learn about your scheme and ask the questions that matter to you.

Find a seminar near you.

Call us to speak to a planner about your SASS benefit.

You can log in to your SASS account to review your investment choices.