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When you think about budgeting for retirement, most people’s eyes glaze over with a lack of excitement. After all, who wants to work out how much money they can save before retirement, and how far they can make their budget stretch after they retire? I hate to say this - but YOU do! Trust me, one of the keys to an epic retirement is having robust financial confidence on your journey in and in your retirement years. This requires you to build not one, but two budgets as you plan for retirement.

Your pre-retirement cost of living and lifestyle budget, which should be designed to use your income to pay monthly expenses, live well in the years leading up to retirement and pay down your personal and mortgage debts. It should see you build up your savings while working, maximising the use of superannuation concessions wherever possible.

Your post-retirement cost of living and lifestyle budget, should form the fundamental numbers for your cost of living after retirement, and build in spending for one-off expenses and achieving your epic retirement goals. This budget should attempt to moderate your spending so you draw down enough money from your retirement savings to sustain the standards you have planned to, but retain suitable funds for the years that lie ahead. And your income in this budget should be calculated from the various income sources you expect to have in your retirement years, potentially including the pension, your superannuation income stream, and income from investments.

Now that you know where you’re headed, there are a few fundamental things you’ll need to work through to prepare your budgets. Download our Epic Retirement Budget Template at and work through the steps.

Calculating how much income you will have

The income in both budgets should be firmly based on reality, not fiction. That is, the income you detail in them should be based on calculations from real or projected income levels. And this is not a simple task at this turning point to retirement.

Sure, it’s pretty easy to determine how much you’ll earn from your job, and any investments you are more deeply familiar with before you retire. But for pre-retirees approaching retirement, they will for the first time have to try to figure out how much they might draw from the pension, their investments outside super and from a superannuation income stream, each challenging task that may require the advice of a financial planner.

Setting out your cost of living

Similarly, setting your expenses before retirement might seem quite logical, but your cost of living budget in retirement might be a little more tricky.  Your goal in your pre-retirement budget should be to carefully manage your expenses to prioritise saving wherever possible. And your post-retirement cost of living budget should be smart, sensible and sustainable.

You’ll want to take in your pension eligibility and eligibility for other concessions and build your budget based on both the real costs of bills and expenses you can see now or benchmarks from publicly available sources that are adjusted regularly for inflation.

One of the most common benchmarking tools for living expenses in retirement is the quarterly cost of living budget monitored by the Australian Superannuation Funds Association called the ASFA Retirement Standard. The ASFA Retirement Standard reviews each of the common line items on a budget of average retirees, living at two different tiers of living standards, a ‘comfortable’ and a ‘modest’ standard of living.

How much do you need to budget to live a comfortable retirement?

For most people, the goal should be to try and save enough money before they retire to live at a comfortable standard of living in their retirement years if they can.

For a single person, the living expenses that provide a comfortable retirement can be achieved with an income of $50,004, if you own your own home outright when you retire.  And for a couple, this amount is $70,482. These amounts assume that you own your own home outright when you retire and they do not take into consideration any rent payments. They don’t allow for additional spending like buying a car or paying a mortgage or rent. If you have to choose a more modest retirement, ASFA says this is achievable for a single person with an income of $31,785 or a couple with $45,808.

ASFA takes it further, extrapolating from these numbers the amount of money you’ll need in superannuation to live a comfortable retirement and a modest retirement, suggesting in March 2023 that couples need $690,000 in superannuation between them to live comfortably and single people need $595,000 if they rely on a part-pension. And that both couples and singles need $100,000 in superannuation to live a modest retirement if they rely on a full pension. Of course, these numbers don’t factor in one-off expenses or epic retirement expenses. And if you are not eligible for a part pension, the amounts you need in super are quite a bit higher.

Calculating the one-off expenses in your years ahead

Fundamental to building a retirement budget you can rely on is taking in the one-off expenses you will need or want to incur in the next years of your life and building an amount you’ll need. You may want to buy a new car every five or six years or have the funds to renovate your home as you age, install a lift or simply maintain it well. You may want to have an amount tucked away for your health needs, in case you need a non-emergency surgery to improve your quality of life, or you simply might want to pay down some personal debts.

Budgeting for your big epic retirement experiences

Finally, the last part of your budgeting process is planning out your epic retirement budget, the money you set aside for the things that are too big and too special to be done with your annual cost of living budget. Think about experiences like big caravan adventures, international holidays, multi-generational family moments like weddings and anniversaries and family holidays, and big-ticket toys. There’s a separate section on our budgeting template devoted to this, which you can fill out separately.

When you budget for retirement, you always do it in today’s dollars, even though you’ll be budgeting for years into the future. Then, working with a financial planner or well-equipped calculator, you index your budget for inflation. Most calculators and planning tools do this as a key step in the process.

You can go to to download our budgeting template in an easy-to-use Excel spreadsheet. This will get you started.

  • How to Have an Epic Retirement - Bec Wilson

    The ultimate guidebook for modern retirees, created by the founder of Starts at 60. With practical information, examples and questions covering the four big pillars of great modern retirement - financial security, health, happiness and fulfilment, and travel - this is a must-read for those who want to make the most of the retirement ahead of them.

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