How do I calculate my retirement income from my superannuation?

Factors Affecting Retirement Income from Super

Several factors influence how much retirement income you can generate from your super. Here’s a breakdown of the key ones:

  • Superannuation Balance: This is the total amount of money accumulated in your super account throughout your working life. It comprises contributions from you and your employer, along with investment earnings. A larger super balance translates to a greater potential income stream in retirement.
  • Contributions: Regular contributions to your super account significantly impact the final balance. These contributions include:
    • Employer contributions: Australian law mandates employers to contribute a minimum percentage of your salary (currently 10.5%, rising to 12% by 2025) into your nominated super fund.
    • Salary sacrifice contributions: Salary sacrificing involves redirecting a portion of your pre-tax salary into your super. This reduces your taxable income and boosts your super balance.
    • Personal contributions: Voluntary contributions you make directly to your super fund can significantly enhance your retirement savings.
  • Investment Earnings: Your super savings are invested in various asset classes (e.g., shares, bonds, property) with the aim of generating returns. The investment performance of your super fund directly affects your retirement income.
  • Fees and Charges: Super funds levy fees to cover administration, investment management, and insurance costs. These fees eat into your investment returns and ultimately affect your retirement income.
  • Retirement Age: The age at which you decide to retire significantly impacts your super balance. Earlier retirement means you have fewer years for your super to accumulate earnings. Conversely, delaying retirement allows your super balance to grow for a longer period.
  • Life Expectancy: Your estimated lifespan influences how long you need your super to support you financially. A longer life expectancy necessitates a more conservative withdrawal rate to ensure your super lasts throughout your retirement.

Estimating Your Retirement Income

While predicting the exact amount of retirement income you’ll receive is impossible due to market fluctuations and individual circumstances, you can estimate it using a framework that considers the factors mentioned above. Here’s a simplified approach:

  1. Gather Information:
    • Find out your current super balance from your super fund statement.
    • Determine your expected employer contributions based on your salary.
    • Research historical investment returns of your chosen super fund or a balanced investment option.
    • Estimate the fees charged by your super fund.
    • Decide on your desired retirement age.
    • Consider your estimated life expectancy (tools like the Australian Bureau of Statistics life tables can be helpful).
  2. Project Your Super Balance:
    • Use a superannuation calculator available online from many super funds or financial institutions. These calculators consider factors like contributions, investment earnings, and fees to project your future super balance at your retirement age.
  3. Sustainable Withdrawal Rate:
    • A sustainable withdrawal rate is the percentage of your super balance you can safely withdraw each year to maintain your income throughout retirement. A commonly used rule of thumb is the 4% rule, which suggests withdrawing 4% of your super balance annually and adjusting for inflation each year. This withdrawal rate is considered conservative and may be adjusted based on your individual circumstances, risk tolerance, and expected lifespan.
  4. Calculate Retirement Income:
    • Multiply your projected super balance at retirement by your chosen sustainable withdrawal rate. This will provide an estimate of your annual retirement income from superannuation.

Here’s an example:

John, currently 40 years old, has a super balance of $100,000. He expects employer contributions of $10,000 annually, invests in a balanced super fund with historical returns of 7% per annum, and incurs fees of 1% per year. John plans to retire at 67 and has a life expectancy of 85.

Using a superannuation calculator, John projects his super balance at 67 to be $1,000,000. Applying a 4% sustainable withdrawal rate, John estimates an annual retirement income of $40,000 from his superannuation alone ($1,000,000 * 0.04).


  • This is a simplified example, and actual results may vary.
  • Consider seeking professional financial advice for a personalized retirement plan.


Leave a Reply

Your email address will not be published. Required fields are marked *