With rising costs, longer life expectancies, and economic uncertainty, having a well-structured investment plan is more important than ever. Yet, many Australians struggle to answer a crucial question:

How much do I really need to retire?

Retirement isn’t just about stopping work—it’s about securing a comfortable and fulfilling lifestyle for decades to come. For pre-retirees, aged 45-60, the financial decisions made today will determine whether they can maintain their desired standard of living in retirement.

How Much Do You Really Need to Retire?

You’ve likely heard estimates like $595,000 for singles and $690,000 for couples (ASFA guidelines). While these figures provide a general benchmark, the reality is far more personal—your retirement income should be based on your actual expenses and lifestyle goals rather than broad assumptions.

Retirement planning isn’t about chasing a single “magic number.” Instead of relying on broad estimates like the 70% rule, a far more effective approach is to create a detailed, personalised retirement budget that reflects your unique lifestyle, commitments, and financial priorities.

Step 1: Breaking Down Your Retirement Budget

The best way to determine how much income you’ll actually need is to remove expenses that won’t continue into retirement and focus on what will:

Essential Costs: Housing (if applicable), utilities, food, healthcare, transport, insurance.
Lifestyle Expenses: Travel, dining out, hobbies, entertainment, social activities.
Family Support & Legacy: Helping children or grandchildren, philanthropy, gifting.
Non-Essential Expenses to Remove:

• Mortgage repayments (if fully paid off).
• Personal insurances (once self-insurance becomes viable).
• Work-related expenses (commuting, work attire, memberships).
• Children’s costs (if they’ll be financially independent).

By doing this deep-dive into your budget, you’ll arrive at a realistic income figure for retirement—rather than relying on generic estimates.

Step 2: Factoring in Non-Super Assets

Your superannuation will likely be your primary source of retirement income, but it’s important to consider other assets that can supplement your lifestyle, including:

• Investment Properties – Rental income can provide reliable cash flow, but needs careful structuring to ensure tax efficiency and sustainability.
• Share Portfolios & Managed Funds – Can generate passive income through dividends and capital growth.
• Business Interests – If you own a business, planning your exit strategy or succession is key.
• Savings & Cash Reserves – Accessible funds for emergencies or large one-off expenses.

By combining these two steps, you’ll gain a clear understanding of your income needs and identify the ideal funding solution to support you throughout retirement.

Smart Investment Strategies for Pre-Retirees

As retirement approaches, investment strategies should shift from growth-focused accumulation to income stability and risk management. While some exposure to growth assets is still necessary to outpace inflation, the priority should be to protect capital and generate reliable income.

Here’s what pre-retirees should consider:

Asset Allocation & Risk Balancing

• The right mix of growth (shares, property) and defensive (bonds, cash) assets depends on your risk tolerance and income needs.
• Diversification helps protect against market downturns while ensuring income continuity.

Transition-to-Retirement (TTR) Strategies

• A TTR pension allows those over 59 to access super tax-effectively while still working.
• TTR can provide extra income, reduce taxable income through salary sacrifice, and boost retirement savings.

Salary Sacrificing & Tax Efficiency

• Boosting super contributions in your final working years takes advantage of tax concessions and compound growth.
• Spouse super contributions can help even out balances and improve Age Pension eligibility in later years.

A financial planner can tailor these strategies to ensure your investments support your desired income, risk profile, and long-term wealth goals.

Why Planning Early Reduces Risk and Maximises Your Options

It’s never too early to start planning for retirement, but waiting too long can limit your choices. The earlier you take action, the more control you’ll have over your financial future.

Leverage the Power of Compounding
Even small additional contributions in your 50s can significantly boost your retirement savings, thanks to compound growth.

Avoid Common Retirement Mistakes
Many retirees regret not seeking professional guidance sooner, leading to suboptimal investment decisions, inefficient tax structures, and avoidable financial stress.

Stress-Test Your Plan
A financial planner can help model different retirement scenarios, factoring in variables like market downturns, inflation, and healthcare costs to ensure your strategy is resilient.

Is Your Retirement Plan on Track?

Planning for retirement involves many moving parts—from investment decisions to superannuation strategies and tax efficiency. At Wealth Fundamentals, we provide tailored financial advice to help pre-retirees build a secure, sustainable plan for the years ahead.

With our tailored, strategic approach to retirement planning, we help you achieve peace of mind and financial security. Contact Matt Lane or Alec Winter on 07 3720 1299 or email admin@wealthfundamentals.com.au to discuss how we can support your retirement journey and optimise your cash flow for lasting stability.

Lane Moses Pty Ltd ABN 56 092 186 117 trading as Wealth Fundamentals and its advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306.

The information (including taxation) contained within this document does not consider your personal circumstances and is of a general nature only – unless otherwise stated. Wealth Fundamentals strongly suggests that you should not act on it without first obtaining professional advice specific to your circumstances. This information is based on our understanding of legislation at the time of writing. Such legislation may be subject to change. This publication cannot be reproduced in any form without the express written consent of the author.