Is $70,000 a realistic retirement income?

The way retirees spend their money in retirement and their desired standard of living will have a significant impact on how much income they will need. With new figures released by the Association of Superannuation Funds of Australia (ASFA) showing that the comfortable retirement standard had risen 0.7 per cent to record highs, could $70,000 be enough to fund a comfortable lifestyle for a couple?* That may depend very much on a person’s salary during their lifetime and the spending to which they are accustomed.

To determine if $70,000 will be enough for a couple’s retirement, advisers must examine several factors, including the stages of retirement through which a person will go, their desired standard of living and expected living costs, such as housing, healthcare and leisure expenses. Such costs can be significant, and the prices of many items are rising quickly due to inflation and ever-increasing demand due to the ageing of the population.  

According to data from the Australian Bureau of Statistics, the Pensioner and Beneficiary Living Cost Index (PBLCI) recorded a 3.9 per cent rise in the December 2023 quarter over the year. The PBLCI measures living costs for Age pensioner and other government transfer recipient households. Separately, living costs for self-funded retirees rose 3.4 per cent over the year.  The costs of aged care have been accelerating and are likely to continue to increase at a rate higher than inflation.  

The ASFA Retirement Standard has done some of the work and provides a breakdown of expected expenses for both a comfortable and modest lifestyle, for couples and singles, to maintain a healthy, vital and connected lifestyle in retirement. ASFA also estimates the superannuation balance required to achieve this, assuming that retirees will draw down on all their capital and receive a part Age Pension.

A comfortable lifestyle involves spending more on the good things in such as travel, eating out as well as the essentials such as health insurance. Self-funded retirees for example, have the highest proportion of expenditure for domestic holiday travel and accommodation.  A modest lifestyle, in contrast, is considered a step up from the spending that you could afford if your only source of income was a full Age Pension.

According to ASFA, this is what retirees would need.

ASFA Retirement StandardAnnual living costsWeekly living costs
Couple – modest$47,387.00$907.80
Couple – comfortable$72,663.00$1,392.01
Single – modest$32,915.00$630.55
Single – comfortable$51,630.00$989.07

Source: ASFA Retirement Standard, March quarter 2024

However, whether $70,000 or even $100,000 is enough for retirement, will depend very much on the individual client and the level of income to which they have been accustomed to throughout their working life, according to Jennifer Langton, Head of Aged Care Personal Advice at Aged Care Steps.

She points out that every retiree is different, and their financial needs will vary greatly, well beyond a simple demarcation between ‘modest’ and ‘comfortable. Living costs will depend on whether a person is retiring with smaller superannuation balance and relying on Centrelink support or a high-net wealth client self-funding their retirement. Costs too will vary during the different stages of retirement. 

Breaking down retirement into stages 

According to Langton, retirees benefit from financial planning which takes into account their needs in three separate stages of retirement, as defined by the client’s health and capacity, rather than by their age. The three stages are defined as follows.

Active Retirement

This stage begins immediately after retirement, characterised by high energy and relatively good health. Many retirees travel, engage in hobbies, volunteer, or take up new learning opportunities. Financial planning for this stage often includes budgeting for travel and leisure activities. Health maintenance and staying socially active are crucial, says Langton.

Passive Retirement

As retirees age, they may slow down and reduce their activity levels, says Langton. Some retirees may maintain their independence but also may require an increasing level of living support from others. Time is often spent at home, with less frequent travel or social engagements. Retirees may focus on more sedentary hobbies such as reading, gardening, or watching TV. Adjustments in the financial plan may be necessary to account for reduced activity expenses. Healthcare costs may begin to rise, requiring even more careful budgeting.

Frail years or supported retirement

In these final stages of life, Langton says retirees often require higher levels of support on a day-to-day basis to maintain their quality of life or to overcome the restrictions of the incapacity or frailty. This stage may involve moving to downsizing, moving to assisted living facilities or receiving home care. This requires a significant focus on healthcare and long-term care planning. Financial needs may be greater if a person meets to meet the costs of assisted living or nursing home care.

These three stages are distinct and their lengths may vary. But as a percentage of the remainder of 65-year-old person’s life (based on life expectancy), these three phases account for the following proportion:

Retirement phaseMenWomen
Active years45%45%
Passive years37%30%
Frailty years18%25%

Adopting a financial strategy for retirement based on these three stages is important as it can involve a more accurate assessment of their financial needs depending on which stage they are at. By adopting such a strategy, advisers have the opportunity to educate their clients and encourage pre-planning for aged care as part of retirement advice. That should start with having a conversation with all clients to discuss how they expect to fund their aged care costs, highlighting that Australian legislation has been shifting towards a greater user-pays basis. Most importantly, the level of income required for a retiree should be adjusted based on the person’s retirement phase, as explained above.  

Retirees will likely need an increasing level of support during the last 10 to 12 years of their life, with many experiencing high levels of care dependency in the last four to six years of their life.  The provision of tailored financial advice is key to supporting clients through retirement to understand their options.


The Money & Life website is operated by the Financial Advice Association (FAAA). The information in this article is not intended to influence the viewer to make a decision in relation to any particular financial product, class of financial product, or interest in either of these.  The FAAA is not licensed to provide financial product advice.  Nor is it able to provide legal or taxation advice. The FAAA does not assume responsibility for the information accessible via any links provided may relate to you.


The FAAA is the leading professional association for financial advice professionals in Australia. The FAAA advocates for the interests of financial advisers and their clients across the country. Find out more here.
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