How to Estimate Your Retirement Spending Needs

Start with household spending

A retirement target depends on housing costs, household size, health, dependants and planned spending. Create an annual budget before choosing a balance target. A published industry standard is a benchmark based on assumptions, not a requirement or a promise that a particular balance will be enough.

Keep projections and income separate

A balance projection and an annual withdrawal estimate answer different questions. For example, 4% of $500,000 is $20,000 before any other effects. That arithmetic does not establish a sustainable withdrawal rate or an entitlement to another income source.

Use current pension settings

From 20 September 2026 the basic maximum pension, including standard supplements, is $1,237.70 a fortnight for singles and $1,866.00 for a couple combined. Actual payments depend on eligibility, residence and both means tests. Do not add a maximum pension automatically to investment income.

Compare a range of assumptions

Use conservative and alternative scenarios for returns, inflation, fees, insurance costs and retirement timing. Clearly label nominal versus inflation-adjusted values. Investment returns vary and a fixed-return illustration does not model the order of returns or every risk.

Review limits before moving money

The 2026–27 general transfer balance cap is $2.1 million, but personal transfer balance caps can differ. Conditions of release, tax components and contribution rules also need checking. A calculator cannot determine a suitable product or retirement strategy.

Sources and next steps

See Services Australia and Moneysmart. Compare scenarios with the calculator. This guide is educational only; consider qualified professional advice.