Table of Contents
- Why an Accurate Calculation of Retirement Income Needs Matters
- Step 1: Work Out What Your Retirement Lifestyle Will Cost
- Step 2: Consider the Financial Resources Available to You
- Step 3: Understand How Long Your Money Needs to Last
- Step 4: Build Your Retirement Strategy
- Step 5: Review Your Plan as You Approach Retirement
Last Updated: September 6, 2026
Why an Accurate Calculation of Retirement Income Needs Matters
Retirement planning starts with a simple but important question:
If you were retired today, how much income after tax would you need each year to enjoy the lifestyle you want?
This is one of the key questions in the Game of Money®, the financial planning framework developed by GPS Wealth. Rather than starting with a superannuation balance or an investment return, the focus is on understanding the lifestyle you want to achieve and then determining what financial resources are needed to support it.
Knowing your required retirement income provides a foundation for making decisions about superannuation, investments, debt reduction, cash flow and other wealth-building strategies.
Step 1: Work Out What Your Retirement Lifestyle Will Cost
Start by thinking about how you would like to live in retirement.
Consider your regular expenses, such as:
- Housing and household costs
- Food and groceries
- Utilities and communications
- Transport and vehicles
- Insurance and healthcare
- Holidays and travel
- Hobbies and entertainment
- Gifts and financial support for family
- Home improvements and maintenance
Don’t simply assume that your current spending will continue unchanged. Some expenses may disappear when you retire, while others may increase.
For example, commuting and work-related expenses may fall, while travel, leisure and healthcare costs could increase.
The objective is not to produce a perfect number. It is to develop a realistic annual after-tax income target that reflects the lifestyle you want.
A useful question
If you stopped working tomorrow, how much income would you need each year to maintain your desired lifestyle?
This question helps turn retirement planning from an abstract discussion about accumulating wealth into a tangible lifestyle goal.
Step 2: Consider the Financial Resources Available to You
Once you have established your desired retirement income, consider where that income could come from. Potential sources include:
| Income source | How it may contribute |
|---|---|
| Superannuation | Provides a major source of retirement capital and income |
| Age Pension | May provide some or all of your retirement income, depending on eligibility |
| Investments | Shares, managed investments, property and other assets may generate income |
| Employment income | Part-time work can supplement retirement income |
| Cash and term deposits | Can provide accessible savings and interest income |
| Other income | May include rental income, pensions or other sources |
The objective is to understand how these resources can work together to support your desired lifestyle.
Step 3: Understand How Long Your Money Needs to Last
Retirement planning isn’t simply about accumulating the largest possible superannuation balance.
It is about having sufficient financial resources to support your lifestyle for the rest of your life.
As you approach retirement, the focus shifts from simply building wealth to both preserving wealth and creating sustainable income. This is reflected in the Game of Money® framework, where the Countdown to Retirement stage examines wealth creation and preservation strategies, reviews goals and ensures the overall plan remains on track.
Once you retire, the focus becomes maintaining your lifestyle, maximising appropriate income streams and considering how long your money is likely to last.
Step 4: Build Your Retirement Strategy
Your retirement income target can then be used to assess whether your existing financial position is likely to support the lifestyle you want.
Depending on your circumstances, your strategy may include:
- Growing your superannuation
- Making additional superannuation contributions
- Managing your cash flow
- Reducing debt before retirement
- Building investments outside superannuation
- Reviewing your investment strategy
- Considering your eligibility for the Age Pension
- Establishing an appropriate retirement income strategy
These strategies should work together rather than being considered in isolation.
The Game of Money® framework identifies smart cash flow, debt reduction, superannuation and investments as strategies that can help build wealth before retirement.
Step 5: Review Your Plan as You Approach Retirement
Your retirement income needs are unlikely to remain unchanged.
Your goals, spending, investment portfolio, superannuation balance, debts, health, family circumstances and retirement date may all change.
That’s why retirement planning should be an ongoing process rather than a one-off calculation.
The Game of Money® describes the final stage as “Retire in Style” — understanding your goals, ensuring your estate plans are in order, reviewing how long your money will last and maximising appropriate income streams.
The Bottom Line
A successful retirement strategy starts with the lifestyle you want, not simply the amount of superannuation you have accumulated.
Ask yourself:
“If I were retired right now, how much income after tax would I need each year to pay for my lifestyle?”
Once you have a realistic answer, you can work backwards to determine the assets, superannuation, investments and income streams you may need to support that lifestyle.
This is the essence of moving from simply accumulating wealth to planning for the retirement you want.
Veyron Wealth Group can help you assess your retirement income needs and develop a strategy that considers your superannuation, investments, cash flow, tax position and retirement objectives.
The information contained in this article is general in nature and provided for information purposes only. Any references to investment returns, performance, asset classes or market conditions are not intended to constitute personal financial advice. While reasonable care has been taken in preparing this material, no liability is accepted by Veyron Wealth Group or Count, its related entities, agents or employees for any loss arising from reliance on this information. Past performance is not a reliable indicator of future performance and investment returns are not guaranteed. Clients need to assess the appropriateness of any information in light of their individual circumstances, consider the relevant Product Disclosure Statements (PDS) and other disclosure documents, and obtain personal financial advice prior to making any investment decision.
Planning for retirement involves many moving parts, from estimating spending to projecting your superannuation balance and navigating age pension rules. Veyron Wealth Group provides tailored financial advice that puts your interests first, helping you balance current needs with long-term goals. Get a Free Consultation at https://veyron.com.au/book-consultation/ and take the next step toward a secure retirement.
