How much do I really need to retire?
- Nijo Antony
- 9 hours ago
- 3 min read
One of the biggest financial questions most Australians will ask at some point is: “How much do I actually need to retire?”
And while most expect a magic number, the truth is, there’s no single answer.
Retirement is personal. It depends on how you want to live, who you want to look after, and how well your wealth is structured, both inside and outside super.
But what’s clear is that relying on the Age Pension alone won’t be enough for most of us.
Let’s explore what retirement really costs, how the new super tax laws could affect you, and what smart strategies look like today.
Could I Get the Age Pension?
Many Australians hope the Age Pension will cover retirement, but the reality is quite different.
As of now, the maximum full Age Pension for a couple is around $46,202 per year (combined)*. But to fund what’s considered a comfortable lifestyle, ASFA estimates you’ll need closer to $70,000–$80,000 per year for a couple.
That’s a $25,000–$35,000 annual gap that you’ll need to fund yourself.
And remember with longer lifespans:
Men now live on average to 81.1 years
Women average 85.1 years
That’s potentially 25–30 years in retirement
Relying purely on the pension leaves many Australians short and vulnerable to rising costs.
How Much Do I Need to Self-Fund Retirement?
Let’s take a common scenario:
A 65-year-old couple who own their home and want:
$80,000 p.a. income (net of tax),
Over a 30-year retirement, and
Earn an average return of 3.5% above inflation
They would need around $1.45 million in investments at retirement to fund this lifestyle, not including the Age Pension.
If they qualify for part-pension, the funding need drops slightly. But if their assets (excluding their home) exceed $1,074,000, they get nothing.
Now Add a New Layer: The Division 296 Super Tax
The Government recently confirmed changes to the Division 296 tax, affecting Australians with super balances over $3 million.
Here’s what’s changing:
What’s New | Details |
Start Date | 1 July 2026 |
What’s Taxed | Only realised earnings (no more unrealised gains) |
Thresholds | $3M and $10M both indexed with CPI |
New Tier | Higher rate applies to balances over $10M |
Example: The Patel SMSF - Realised Earnings Now Count
Super Balance: $4.5M (FY27)
Realised Income (e.g. rent, dividends): $220,000
Proportion above $3M: 33.3%
Taxable Portion: $220,000 × 33.3% = $73,260
Division 296 Tax = $10,989 extra tax payable by Mr Patel personally
So even though unrealised property growth is now excluded, large balances still attract tax on earnings, especially for SMSF members drawing pensions.
Three Real People. Three Different Retirement Stories.
Jenny & Rob - Planning for Lifestyle, Not Just Survival
They had $1.2M in super, aimed for $80,000/year, and wanted to travel and help grandkids with education.
But they hadn’t protected their wealth, no Family Trust, old SMSF deed, and no estate plan.
We helped them:
Equalise balances to stay below the $3M cap each
Set up a Family Protection Trust
Create an SMSF Will to ensure benefits flowed cleanly
Their retirement is now lifestyle-driven and legally protected.
Maria - Modest Savings, Big Responsibility
Maria is a 58-year-old carer for her adult daughter. She plans to retire on $50,000/year, mostly from her super and a small inheritance.
Her worry wasn’t money, it was who would look after her daughter when she’s gone.
Our solution:
Special Disability Trust
Super structured to preserve Centrelink
Peace of mind for both generations
Proof that even modest balances need smart planning.
Tony - Business Owner Approaching the $3M Threshold
Tony, 60, is selling his business soon. His super is currently $2.8M, expected to exceed $3.5M in 2 years.
He hadn’t heard of Division 296. He also had:
No estate plan
Blended family complexities
An invalid BDBN
What we implemented:
Bloodline Will & Leading Member SMSF Deed
Asset reshuffle into a Family Trust
Clear succession plan for control of assets
Now, Tony avoids the super tax sting and family disputes.
What You Can Do Now
Here’s how we’re helping clients prepare:
Balance Equalisation - between spouses to manage thresholds
Tax-smart structuring - protect income from new taxes
Trusts & SMSF Wills - ensure family wealth protection
Contribution strategies - to maximise what you can now, before retirement
It’s not just about how much you have to retire, it’s about what you get to keep, how it’s taxed, and who it benefits.
The Age Pension may play a small part. But to truly retire comfortably and with control, your wealth needs to be structured.
If your super is over $2.5M, or if retirement is less than 10 years away, now’s the time to take action.
Nijo Antony
Director