How much will I need each year in retirement?

Updated: Nov 14, 2019

How much will you need each year in retirement?

This may be a question that you have been asked for from an adviser or have given some thought to when pondering your retirement. This is not an easy number to calculate, especially if you don't budget effectively, but fortunately the Association of Superannuation Funds of Australia (ASFA) come to our aid here.

The ASFA provide guides to both the financial industry and the general public. The ASFA Retirement Standard gives those who are thinking about retirement, which may be many years away, an idea of how much they may need in retirement each year.

The standard gives a detailed budget breakdown and is divided into two categories or retirement standards, and estimates for age 65 and age 85.

Comfortable Retirement

According to the ASFA, "a comfortable retirement lifestyle enables an older, healthy retiree to be involved in a broad range of leisure and recreational activities and to have a good standard of living through the purchase of such things as; household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel" (, 2019).

Modist Retirement

A modest retirement lifestyle is considered better than the aged pension, but the retiree is still only able to afford fairly basic activities (, 2019).


The retirement standard estimate the budget for retirees aged 65 and retirees aged 85. As retirees age their spending habits change. In the early years of retirement retirees tend to spend more on leisure activities and holidays. Then as the get older, these expenses tend to decrease and are replaced by expenses providing a higher level of care and support. These expenses include cleaning services and meals, home care and community services and increased pharmacy and medical expenses (, 2019).

* These budgets assume that the retiree has finished paying off their own home and that they are still relatively healthy. Figures based on September quarter 2019 and represent what will be needed in todays dollars.

For further information and detailed breakdown the ASFA document is accessible here.

Reference: (2019). Retirement Standard - ASFA. [online] Available at: [Accessed 14 Nov. 2019].

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