How Much is Enough in Retirement?

How Much is Enough in Retirement?  

At Hewison Private Wealth, our clients rarely ask, “What’s the minimum I’ll need to scrape by in retirement?” Instead, the questions are more nuanced: “Given my ambitions, how much capital will allow my family and I to maintain our lifestyle, have security, and freedom for decades to come?”  

The answer is simple and almost always deeply personal. It depends entirely on how you imagine your retirement to be and the legacy you wish to create, which you will be remembered for.  

Moving Beyond the “Average” Retirement  

Mainstream benchmarks, such as the ASFA Retirement Standard, suggest certain annual figures to maintain a ‘comfortable’ retirement. For successful families and individuals, whose lifestyles are often defined by travel, multiple residences, legacy ambitions, and significant philanthropic commitments, these guidelines merely serve as a baseline—not the destination.  

Rather than focusing on median figures, we encourage clients to first consider:  

• The level of annual discretionary spending they expect  

• The experiences and aspirations they wish to pursue  

• Family and intergenerational needs  

• Philanthropic and community engagements  

• The enduring legacy they wish to leave  

Designing Your Own Benchmark  

Your retirement capital should reflect your personal aspirations. Begin by evaluating your current lifestyle:  

• What are your annual living expenses and core passions?  

• Do you wish to maintain one principal residence, or is a holiday home part of the picture?  

• How often do you anticipate international travel, hosting family gatherings, or supporting the next generation?  

• What are your expectations for private health care and lifestyle enhancements as you age?  

Once you define your ‘luxury baseline’, we work collaboratively to calculate the capital required—not just to cover annual needs, but to ensure these aspirations remain uncompromised, regardless of market fluctuations or longevity.  

Income Generation Without Eroding Capital  

Many of our clients seek not just to fund their lifestyle, but to do so while preserving—if not growing—their family capital for future generations. True financial security lies in developing a diversified, actively managed portfolio capable of generating sufficient income, while simultaneously providing growth above inflation.  

For most established families, this approach creates two advantages:  

1. Security: Ensuring core capital remains intact despite market volatility, unexpected costs, or changes in life expectancy.  

1. Legacy: Providing a foundation for purposeful intergenerational wealth transfer and philanthropic endeavours—so your success endures beyond your own lifetime.  

Depending on portfolio structure and after-tax returns, living purely on investment income may require a significantly larger capital base—generally upwards of $5 million for couples who desire a truly global lifestyle, and higher for ultra-high-net-worth ambitions.  

Variables to Consider  

Bespoke retirement modelling for private wealth clients should account for:  

• Fluctuations in investment returns and inflation  

• Tax considerations for income and capital distributions  

• Liquidity needs for significant purchases or gifting  

• Potential for future aged care and medical costs  

• Desire to support family through education, property, or seed capital  

• Flexibility to seize unique opportunities as they arise  

How Much Do You Need to Accumulate for Retirement?  

Standard Guidance: According to calculations from the Association of Superannuation Funds of Australia (AFSA), the estimated lump sum required to fund a comfortable retirement lifestyle is approximately $690,000 for a couple and $595,000 for a single person, assuming partial Age Pension eligibility. This provides a benchmark for the general population seeking to maintain a reasonable standard of living in retirement.  

Alternative Perspective for Successful Individuals and Established Families: For those aspiring to a more elevated lifestyle or greater financial security at good rule of thumb is to multiply your desired annual income by 20.  This will provide an indication of the capital required to achieve the desired lifestyle and preserve capital for future generations. 

By considering both AFSA guidelines and more substantial accumulation scenarios, you can set a retirement vision that reflects your aspirations and ensures enduring financial confidence.  

Why Hewison Private Wealth?  

Your aspirations are unique. At Hewison Private Wealth, we go well beyond standard formulas—delivering bespoke, strategic advice that allows your wealth to grow and endure with confidence. This is made possible through our direct investment philosophy, expertise in structuring complex portfolios, and unwavering commitment to your objectives and legacy.  

If you are seeking a truly individualised retirement strategy—one that adapts to your evolving ambitions and redefines what’s possible for your family—we invite you to begin a discreet conversation with our experienced team.  

Retirement should not simply be comfortable. With vision and partnership, it can be extraordinary.  

Connect with Hewison Private Wealth today to discover how our tailored, independent advice can help you achieve your unique retirement goals.