It’s the question echoing across Australia, searched more than 25,000 times in the last 12 months… How much do I need to retire?

And yet, the answer remains elusive. Why? Because retirement isn’t one-size-fits-all. It’s not about reaching someone else’s finish line, it’s about building the life you've imagined.

Everyone’s version of retirement looks different, and that’s exactly why your own plan and your ‘retirement number’ should reflect YOU and your goals.

What makes up your retirement number?

Your retirement number is the total amount of money you’ll need to support your lifestyle once you stop working. It may include:

• Housing, food, utilities, and transportation. Don’t forget about simple pleasures that enrich your life, like your daily flat white or time spent on the green.
• Insurance, prescription medication, routine health and beauty appointments such as skin checks, haircuts, dental care and other ongoing needs.
• Travel, hobbies, dining out (helloooo spicy margaritas), meaningful gifting and the experiences that make retirement uniquely yours.

Understanding your current spending habits and thinking about how these may change when you step away from work is a good starting point.

Why it matters more than you think

Knowing your retirement number early empowers you to:

• Set clear financial goals that reflect your lifestyle, values and aspirations.
• Choose strategies that work for you - be it boosting your super, investing wisely, or simplifying through downsizing. A financial adviser can help tailor a plan that’s appropriate for your circumstances, goals and risk profile.
• Save enough to fuel your dreams, but not so much that you don’t enjoy the journey to retirement.
• Navigate the next chapter with less worry and more clarity around your financial future.

When your number is unclear, it’s easy to second guess your decisions. Defining it puts you firmly in the driver’s seat.

Estimate your retirement number with the 25x rule

To benchmark how much you may need for retirement, a general guide is to multiply your desired annual income by 25 to estimate how much you might need in retirement.

Why 25? It’s based on a general guideline referred to as the 4% drawdown rule . The idea behind this rule is that if you withdraw around 4% of your retirement savings each year, your investments may continue to grow enough to cover what you’re taking out, helping your money last through retirement.

For example, if you want $100,000 a year in retirement: $100,000 x 25 = $2.5 million

In this example, 4% of $2.5 million is $100,000 - your target income. This approach is based on general modelling and does not reflect legislated minimum pension drawdown rates, which vary depending on your age and circumstances. For example, someone aged 75 is currently required to withdraw a minimum of 6% from their super income stream.

Sally Huynh, Shadforth Private Wealth Adviser says, “the idea is that by drawing down 4 per cent a year, provided nothing goes terribly wrong with the markets, your invested balance should continue growing above the amount you’re withdrawing to fund your expenses”.

Knowing your number is a great first step, next comes figuring out how you’ll get there. Building long-term financial independence requires a solid income and a lot of dedication, Huynh says. “The reality in wealth creation is really simple, but it’s not always easy.”

Some great resources to help you get started

Moneysmart tools are provided by ASIC. Inclusion of links in the table above does not imply affiliation, endorsement or sponsorship by ASIC or ASFA.

Don’t guess. Get professional advice.

There’s no single path to retirement and no single number that fits everyone. That’s why expert financial advice is essential. A qualified adviser will help you develop a roadmap to your ideal retirement, accounting for inflation and changes in legislation, potential government support and evolving lifestyle goals.

Getting expert advice early, before retirement, can make the difference between just getting by and living life on your terms.

Build the retirement that reflects you

Retirement isn’t just about leaving work behind, it’s about entering a new chapter with clarity and confidence. Start by asking the right questions, understanding your options, finding your number and seeking smart advice.

Because when it comes to your future, guessing shouldn’t be part of the plan.

¹ William P. Bengen (2004). Determining Withdrawal Rates Using Historical Data. Journal of Financial Planning. Financial Planning Association. [Accessed August 1, 2025]. Available at: https://www.financialplanningassociation.org/sites/default/files/2021-04/MAR04%20Determining%20Withdrawal%20Rates%20Using%20Historical%20Data.pdf