Based upon the ASFA Retirement Standard a couple wanting a comfortable lifestyle in retirement will have to spend $58,128 pa.  A single seeking the same comfortable lifestyle in retirement will have to spend $42,433 pa.  

Similarly, a couple who only want a modest lifestyle in retirement will have to spend $33,664 pa.  A single seeking the same modest lifestyle in retirement will have to spend $23,363.

Putting this into perspective, assuming all commence retirement at age 65 and the pension account being drawn down at the minimum rate of 5%, then the necessary initial pension account balance will be:

  • $1,162,560 to produce a comfortable retirement for a couple
  • $848,660 to produce a comfortable retirement for a single
  • $673,280 to produce a modest retirement for a couple
  • $467,260 to produce a modest retirement for a single. 

The account balances have been determined by dividing the annual lifestyle income amount by 5% and is provided merely to illustrate the initial balance required at the minimum drawdown rate.  This is probably a crude overestimate of the required initial pension account balance as it does not take into account the differential between earnings and inflation and it does not take into account the fact that capital will sooner or later be used to finance pension payments. The annual amounts for the relevant retirement lifestyles are taken from the ASFA Retirement Standard for June 2014.

The minimum balances stated above must not be taken as a recommendation or suggestion that the balances will be able to finance the relevant retirement lifestyle. To better understand your individual requirements contact WLM.