How Much Do You Really Need to Retire?

Why the Question Might Be Misleading

For decades, one question has dominated retirement planning: “How much do I need to retire?”
Financial websites, calculators, and news articles often present a single magic number - $500,000, $1 million, sometimes more. The implication is clear: reach that target, and your future is secure.

But the truth is more complex. Focusing on a single lump sum can lead people to overlook what actually matters most in retirement.  It’s not the size of the pile, but the reliability of the income it generates and how long it will last.

The Problem With the Magic Number

Lump sum thinking has one major flaw: it assumes that life - and markets - will behave exactly as expected. These targets are usually based on average life expectancy, fixed rates of return, and constant spending patterns.

But real life rarely follows a neat formula.

People live longer than expected. Costs of living change. Health expenses spike. Markets dip just when you need the money. What looks like ‘enough’ at age 65 can look worryingly small at 75 - particularly if your retirement income depends on slowly drawing down a fixed savings pool.

This is why so many retirees remain anxious, even when they’ve reached their savings goal. Most retirees only have a finite amount of super savings or position themselves around receiving the pension. When the funds run out, so does their financial security.

Shifting the Question: From ‘How Much’ to ‘How Long’

I recently spoke with Jane Purnell - a financial planner who specialises in lifetime income - about this, and we realised the better question is: “How do I set myself up so my money outlives me?”

This shift changes everything. Instead of working towards an arbitrary lump sum, the goal becomes building income streams that can continue for as long as you do. That’s the essence of lifetime income - designing a retirement plan that generates money every month, every year, for the rest of your life.

This view will also change our approach to our ‘working lives’.  Your work life can be used to discover and develop your lifetime income pathway.  Instead of working until ‘65’, retire when your continuous income has been established.

The official recommendation

One of the most confusing issues with the ‘retirement number’ is that there’s a range of  opinions on how to decide on the actual number. 

A flexible approach is to have enough savings to provide an income equal to 70%-80% of your final salary.

A more static number is outlined by the Association of Superannuation Funds of Australia (ASFA) Retirement Standard (which benchmarks the annual budget needed by Australians to fund a comfortable standard of living in their post-work years).  The ASFA estimates a couple hoping for a ‘comfortable’ retirement will need $690,000 in savings and a single person will need $595,000.

Alternatively, Super Consumers Australia estimates a couple currently aged 55, who want enough for a ‘medium’ level of spending, will need $548,000 by the time they turn 65. A single person will need $395,000.

Of course, on top of the targets, you would need to include the variables of whether you own your own home outright, what your view of ‘comfortable’ actually is (local or overseas holidays), and how often you might want to update your car.

Why Lifetime Income Works

Lifetime income planning focuses on assets and strategies that produce ongoing, reliable returns. That could include annuities, dividend-producing investments, and - in my world - income-producing property.

Property has a special role to play here. A well-chosen property can deliver consistent rental income that not only covers your lifestyle but also keeps pace with inflation. With the right acquisition strategy, those income streams can even grow over time, creating more freedom and less financial worry.

In addition, when selected well, capital growth and potential to turn one property into two or more can deliver much more income on a number of levels.

When combined with other income sources such as superannuation, pensions, and investment earnings, the result is a diversified income plan that is far more resilient than relying on a single pool of savings.

The Confidence Factor

The greatest gift of lifetime income isn’t just the money itself - it’s the peace of mind and control over your future. When you know your income is designed to outlive you, you can actually enjoy your retirement rather than constantly checking your balance and doing mental subtraction.

This is the focus we have had at The Property Frontline for quite some time, and now we’re stepping things up.  By blending property expertise with financial planning know-how, we’re helping people shift away from lump sum anxiety and towards income confidence.

Setting the Foundation

If you’re planning your retirement, the starting point isn’t guessing a ‘magic number’ - it’s understanding the lifestyle you want, the income that will support it, and the strategies to make that income sustainable for life.

Over the coming weeks, we’ll be sharing more stories, insights, and practical tools to help you design a future with a property portfolio where your money outlives you - and not the other way around.

Because retirement security isn’t about hitting a target once. It’s about building something that lasts forever.