Australia · Worked example
Plan to Age 85 or 95? The Effect on Australian Retirement Income
Changing the end age changes how many monthly payments your capital must fund. A higher budget from a shorter horizon reflects fewer payments, not an improvement in investment performance.
Assumptions you can reproduce
Start retirement now at age 67 with A$500,000 in super and plan to age 95. Salary and additional contributions are zero because there is no accumulation period. The illustrative annual return is 6% after investment earnings tax but before a 0.5% percentage fee and A$100 annual fixed fees. Inflation is 2.5%. Age Pension is A$0 unless a scenario explicitly changes it.
All retirement amounts are in today's Australian dollars and before personal income tax. The model keeps the entered earnings-tax-adjusted return throughout retirement. It does not switch automatically to a tax-exempt pension account or apply mandatory minimum drawdowns. The separate target-income projection starts at A$45,000 a year; it is not the level budget calculated below.
The same balance across four horizons
| Scenario | Start → end age | First-year annual budget | First-year monthly budget | Try the figures |
|---|---|---|---|---|
| Plan to 85 · 18 years | 67 → 85 | A$35,470 | A$2,956 | Try: Plan to 85 · 18 years |
| Plan to 90 · 23 years | 67 → 90 | A$29,592 | A$2,466 | Try: Plan to 90 · 23 years |
| Plan to 95 · 28 years | 67 → 95 | A$25,871 | A$2,156 | Try: Plan to 95 · 28 years |
| Plan to 100 · 33 years | 67 → 100 | A$23,326 | A$1,944 | Try: Plan to 100 · 33 years |
All rows use the same 6% entered return, fees and 2.5% inflation. The only change is the end age. Amounts are in today's dollars before personal income tax. The age-85 example linked below loads that specific horizon; change it to 95 to reproduce the longer case.
A planning horizon is not a life-expectancy forecast
The calculator does not predict how long you or a partner will live. It stops at the age you choose, and the level-budget calculation generally uses nearly all available capital over that period when there is no later income surplus. A plan to 85 says nothing about how to pay bills at 86.
Check what the end age does not reserve
The model has no separate emergency, aged-care or inheritance reserve. If some money must remain untouched, avoid treating that amount as fully available for the modelled withdrawals. Any manual adjustment should remain visible in your own records so you can reconcile the calculator balance with the actual account balance.
What if a longer retirement also brings lower returns and higher fees?
First change the horizon alone, then the return alone. The final row combines a horizon to 100, a 3% entered return and 1% percentage fees. Every row keeps inflation at 2.5%, fixed fees at A$100 a year and Age Pension at zero.
| Scenario | Start → end age | First-year annual budget | First-year monthly budget | Try the figures |
|---|---|---|---|---|
| To 95 · 6% return · 0.5% fee | 67 → 95 | A$25,871 | A$2,156 | Try: To 95 · 6% return · 0.5% fee |
| To 100 · 6% return · 0.5% fee | 67 → 100 | A$23,326 | A$1,944 | Try: To 100 · 6% return · 0.5% fee |
| To 95 · 3% return · 0.5% fee | 67 → 95 | A$17,720 | A$1,477 | Try: To 95 · 3% return · 0.5% fee |
| To 100 · 3% return · 1% fee | 67 → 100 | A$13,789 | A$1,149 | Try: To 100 · 3% return · 1% fee |
The combined row is an illustrative sensitivity check, not a worst-case boundary or a success probability. Each still uses a constant return. It cannot represent a crash early in retirement followed by a recovery.
Compare the monthly figures with essential costs. A large gap is a reason to investigate assumptions, spending flexibility and reliable income sources. The calculator does not price lifetime income products or replace personal advice about longevity and risk. Its first twelve months are an illustration within the chosen lifetime horizon.
What this example cannot tell you
Returns arrive smoothly every month in this model. Real markets can fall early in retirement, and the order of returns matters when money is being withdrawn. The calculation does not estimate a probability of success. A budget that exhausts capital near the chosen end age leaves no modelled reserve for living longer, large repairs, care costs or an inheritance.
Try a lower return, higher costs and a longer horizon. Check pension access with your provider and compare essential expenses with reliable income. These are invented educational scenarios, not recommended spending levels or personal financial advice.
This link loads only the invented example above. Your own entries are never added to the link. Figures in the article are rounded to whole currency units; the model calculates with unrounded values.
Sources and review record
The official pages below were checked on for the specific statements described. The numerical scenarios are our calculations, not government forecasts. No independent financial or native-language reviewer has approved this material.
- ASIC Moneysmart: types of retirement income — distinguishes super, government benefits and other retirement income.
- ASIC Moneysmart: choosing a super fund — compare percentage and fixed costs alongside investment performance, insurance and services.
- Services Australia: Age Pension — check current eligibility and payment information separately.
Full methodology · Twelve-month budget method · Update log · Independent review brief · Report a correction