Can You Afford to Retire? Find Out in 7 Steps

You may be able to afford to retire when your projected income from superannuation, investments and any Age Pension entitlement can sustainably meet your expected living costs throughout retirement. Assessing this requires a clear view of your superannuation balance, other investments, spending needs, planning assumptions and how long your money may need to last. Fiducian Financial Services helps Australians in their 40s, 50s and beyond assess these factors through personalised financial advice.

This seven-step guide provides a practical framework for assessing whether you can afford to retire. It explains how to evaluate your current financial position, estimate your future income needs and identify any retirement funding gap before you stop working.

Quick Guide: How to Work Out if You Can Afford to Retire in 7 Easy Steps

1. Define Your Ideal Retirement Lifestyle — Clarify the lifestyle you want so you can estimate realistic annual expenses.
2. Calculate Your Expected Retirement Living Costs — Add up housing, health, transport, food and leisure expenses for a typical year.
3. Take Stock of Your Superannuation Balance — Check and consolidate your super accounts to see your total retirement savings.
4. Assess Your Other Income Sources and Investments — Include shares, property, savings and any expected Age Pension entitlements.
5. Estimate How Long Your Retirement Savings Need to Last — Factor in your target retirement age, life expectancy and potential health costs.
6. Identify and Close Any Retirement Funding Gaps — Compare projected income against expenses and explore strategies to bridge shortfalls.
7. Seek Personalised Financial Advice — Work with a qualified financial adviser to stress-test your plan and adjust as life changes.

How Can You Work Out if You Can Afford to Retire?

1. Define Your Ideal Retirement Lifestyle

Start by picturing how you would like to spend your retirement. You may want to travel regularly, renovate your home or enjoy a quieter pace close to family. These choices will shape the income you need each year and provide a practical foundation for your retirement budget.

The ASFA Retirement Standard provides a useful starting benchmark. According to ASFA’s June quarter 2026 figures, a comfortable retirement for a single homeowner requires around $56,166 per year, while a homeowner couple requires approximately $78,998 per year. Because ASFA updates the Standard quarterly, check the latest figures when reviewing your plan.

Write down your priorities. Separating essential needs from lifestyle goals helps you build a budget that reflects your personal circumstances rather than a generic rule of thumb.

2. Calculate Your Expected Retirement Living Costs

Once you have defined your lifestyle, translate those goals into dollar amounts. Group your expenses into categories: housing, utilities, groceries, health insurance, transport, leisure and any ongoing financial commitments such as supporting family members.

If you own your home outright, your housing costs will look very different from someone who rents or still has a mortgage. Allow for costs that tend to increase over time, such as aged care and medical expenses.

Track your current spending for a few months to establish an accurate baseline. Using your own figures can reveal which costs are likely to change in retirement and give you a more reliable starting point than broad estimates.

3. Take Stock of Your Superannuation Balance

For many Australians, superannuation is a principal source of income in retirement. Log in to your super fund’s online portal or use the ATO’s myGov service to identify your accounts and any lost super before considering consolidation.

Before consolidating, check whether closing an old account would cancel any insurance cover you rely on. Fiducian Financial Services offers a superannuation service designed to help you manage your balance within a single, flexible structure.

Your current superannuation balance is a key input in assessing retirement affordability. Confirming this figure gives you a more reliable basis for projecting future savings and income needs.

4. Assess Your Other Income Sources and Investments

Superannuation is rarely your only source of retirement income. List every asset and income stream: savings accounts, term deposits, shares, managed portfolios, investment property and any expected inheritance.

It is also worth estimating your potential Age Pension entitlement through Services Australia. Even a part pension may supplement your annual income, subject to both the assets test and the income test.

If you plan to continue working part-time in the early years of retirement, include that income in your projections. A wealth creation strategy developed during your working years can also be reviewed as your goals, timeframe and income needs change in retirement.

5. Estimate How Long Your Retirement Savings Need to Last

Longer life expectancy means retirement savings may need to support 25 to 30 years of living expenses or more. Australian Bureau of Statistics averages indicate that a person aged 65 may live beyond age 85 if male and beyond age 88 if female. These population averages are a planning reference rather than a personal forecast, so your timeframe should also reflect your health, family history and preferred margin of safety.

Consider the impact of inflation on your purchasing power over time. A dollar today will buy less in 15 or 20 years, so your income needs will grow even if your spending habits stay the same.

A resilient retirement plan includes an allowance for unexpected costs. Health events, home repairs and changes in government policy can affect your expenses, so building a buffer can help your income remain sustainable in later years.

6. Identify and Close Any Retirement Funding Gaps

Compare your projected retirement income against your estimated living costs. If there is a gap, you have several practical options you might consider before you retire.

You could increase your voluntary super contributions through salary sacrifice or after-tax top-ups. Reviewing whether the investment options within your super fund remain appropriate for your goals, timeframe and risk tolerance may also strengthen your retirement strategy. Reducing debt before retirement can lower the amount of income you need each year.

Downsizing your home may free up capital and reduce ongoing housing costs. Eligible Australians may be able to contribute some sale proceeds to superannuation under the government’s downsizer contribution scheme, even when other contribution limits apply. Before acting, confirm the current eligibility criteria, contribution caps and timing requirements for your circumstances.

7. Seek Personalised Financial Advice

A qualified financial adviser can test whether your retirement plan remains sustainable under different scenarios, including market downturns, changes in health, unexpected expenses and shifts in government policy. Personalised retirement planning advice brings your cash flow, assets, superannuation, tax considerations, government entitlements and risk preferences together in one strategy.

Fiducian Financial Services has provided retirement planning support to Australians since 1996 through a nationwide network of licensed financial advisers. Its financial advice service considers superannuation, investments, insurance and estate planning as interconnected parts of a coordinated retirement strategy.

Your circumstances are unique. An adviser who understands your full financial picture can help you compare your options, test the assumptions behind your plan and make informed decisions about the retirement you want.

What Superannuation Balance Do You Need to Retire Comfortably in Australia?

As a starting benchmark, ASFA estimates that homeowners retiring at age 67 need $630,000 in superannuation for a comfortable single retirement and $730,000 for a comfortable retirement as a couple. The amount you personally need will depend on your lifestyle expectations, home ownership and potential Age Pension entitlement.

These figures assume you convert your superannuation into an account-based pension and draw a regular income. If you expect to rent in retirement, your required balance may be higher because ongoing housing costs need to be included in your plan.

Your actual target may differ from the benchmark. Some Australians are comfortable with a modest lifestyle, while others want greater flexibility for travel and dining out. A financial adviser can model a suitable target range using your goals, assets, income sources, timeframe and planning assumptions.

How Does the Age Pension Fit Into Your Retirement Income Plan?

The Age Pension is available from age 67 and is designed to supplement, rather than fully fund, retirement income. From 20 September 2026, the maximum full rate is approximately $32,180 per year for a single person and $48,516 per year combined for a couple, including the Pension Supplement and Energy Supplement. Because payment rates are reviewed periodically, check the latest figures before making retirement decisions.

Eligibility depends on both an assets test and an income test, and the rules can change with government policy updates. If your superannuation balance or other investments sit above certain thresholds, your pension entitlement may be reduced or removed entirely.

Many Australians use the Age Pension as a supplement rather than a primary income source. Combining pension payments with drawdowns from super and other investments can create a more sustainable income stream across the different stages of retirement and estate planning.

How Fiducian Financial Services Helps You Plan for Retirement Affordability

Fiducian Financial Services builds retirement strategies around each client’s income, assets, liabilities, goals and family circumstances. Its advisers assess how these factors interact to recommend a coordinated course of action tailored to the client’s overall financial position.

Through the Fiducian risk management and advice framework, you receive guidance across superannuation optimisation, investment portfolio construction, insurance and cash flow management. This coordinated approach means every element of your financial plan works together.

With more than three decades of experience and a nationwide network of qualified advisers, Fiducian can help you determine whether your assets and income are sufficient to support the retirement you want. Contact a Fiducian financial adviser to begin building a personalised retirement plan based on your financial position and goals.

FAQs About Retirement Affordability in Australia

How much money do I need to retire in Australia?

ASFA suggests that a homeowner retiring at age 67 needs around $630,000 in superannuation for a comfortable single retirement. Your actual target will depend on your desired lifestyle, housing situation and other income sources. Fiducian Financial Services can help you calculate a target tailored to your circumstances.

Can I retire if I still have a mortgage?

Yes, you may be able to retire with a mortgage, but the repayments will increase the income your retirement plan must support. Whether using part of your superannuation to repay the loan improves your position depends on the effect on your remaining retirement income and other goals. A Fiducian financial adviser can model both scenarios and recommend an approach suited to your circumstances.

When should I start planning for retirement?

Start planning for retirement as early as possible, ideally well before you intend to stop working. More time gives your superannuation and investments greater opportunity to grow. Australians in their 40s and 50s may still have meaningful opportunities to strengthen their position through salary sacrifice and voluntary contributions, and Fiducian helps clients at every stage of the planning journey.

What is the ASFA Retirement Standard?

The ASFA Retirement Standard is a quarterly benchmark published by the Association of Superannuation Funds of Australia. It estimates how much money singles and couples need to fund either a modest or comfortable retirement lifestyle, and it is widely used by financial planners across the country.

Should I get financial advice before retiring?

Personalised financial advice can help you avoid costly mistakes and make informed decisions about your superannuation, investments and government entitlements. Fiducian Financial Services provides holistic retirement planning that considers your full financial position, including superannuation, investments, insurance and estate planning, so these elements work together in support of your retirement goals.

 

This information has been provided by Fiducian Financial Services Pty Ltd (ABN 46 094 765 134, AFSL 231103) of Level 4, 1 York Street, Sydney, NSW 2000. Any advice in this document is general in nature and does not take into account your objectives, financial situation or needs. You should receive financial advice relevant to your circumstances before making any decisions.