How much do I need to retire?

Find out how much you may need in retirement based on your life expectancy. 

Research tells us Australians have one of the longest life expectancies in the world1 and we can expect to live well into our 80s2. Due to our improved health and ‘active ageing’, around 40,000 of us will be over 100 by the year 2054-553.

While this might be great news if you’re looking forward to a long and healthy retirement, it might also be a concern if you don’t have enough money to last those extra years.

On the other hand, if you live too frugally in retirement and don’t spend all your savings, you could also leave an unexpected inheritance to your family or estate.

Longevity risk

It’s important to understand, and plan for, your ‘longevity risk’ – the chances of you outliving your retirement savings, or not having enough savings to fund your retirement. Fortunately, there are a few things you can do to help manage this risk.

1. Work out how long you can expect to live

Everyone’s situation is different, so use our life expectancy calculator to estimate this based on factors, such as your age, health, and work/life balance. It may seem a bit daunting, but it’ll help you work out how many years you’ll need to save for, so you can avoid running out of money when you need it most.

2. Assess your income sources

  • The Age Pension. If you meet the criteria to receive the Age Pension, you can expect to receive a regular income. Bear in mind that it may not be enough to fund the lifestyle you want to lead when you stop working. The ASFA Retirement Standard4 suggests that singles aged 65 and over need $43,538 and couples should aim for $59,808 to lead a comfortable lifestyle. This is assuming you own your home outright and are in relatively good health.
  • Superannuation. Some people take their super as a lump sum, while others opt for an allocated pension which provides a regular income for an agreed amount of time in retirement.
  • Investments. You may have investments, or be planning to downsize your house or sell another property to help boost your savings.
  • Savings. You may have money put aside in bank term deposits or savings accounts which you could choose to keep for everyday purchases, such as bills, food, and transport.
  • Inheritance. Perhaps you might be expecting to inherit property or proceeds from your family’s estate, which may help you out in later years.

Whatever income sources you expect to have, it’s important to make sure these will be enough to sustain your lifestyle through 20 to 30 or more years of retirement.

3. Get some support

Striking that balance between making sure you don't outlive your retirement savings and having a comfortable lifestyle in retirement can be a confronting task.

So if you’d like to know more about how to manage your money, try our budget planner calculator or work out a savings plan. Our online learning module Managing your money in retirement is another great resource to check out.

There may also be tax, legal and other implications, so see your financial adviser to work out what’s right for your situation. If you don’t have an adviser, call us on 131 267 or use our find our adviser tool.

1 Treasury, 2015 Intergenerational Report, http://www.treasury.gov.au/PublicationsAndMedia/Publications/2015/2015-Intergenerational-Report
2 AMP.NATSEM Income and Wealth Report, Issue 37 – June 2015
3 Treasury, 2015 Intergenerational Report, http://www.treasury.gov.au/PublicationsAndMedia/Publications/2015/2015-Intergenerational-Report

4 The Association of Superannuation Funds of Australia Limited, ASFA Retirement Standard, December quarter 2016, national)

How long can I expect to live?

This estimate can help you calculate whether or not you'll have enough savings to last throughout your retirement.

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© AMP Life Limited. This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.