To roughly work out the life expectancy of your retirement savings, try our Money Life Calculator


Go to the column which matches the average annual earning rate your investments should achieve.

Move down that column until you reach the average annual capital drawdown rate (far left hand column) you will be making on your savings

Your drawdown rate is the amount of income & capital you will withdraw from your investments each year, divided by the amount you have invested, multiplied by 100.

The number you arrive at in the table estimates the number of years your money will last.

Example of how to calculate your drawdown rate

Let’s say someone has $600,000 in retirement savings and they require an income of $54,000 p.a. Their drawdown rate is:

$54,000 ÷ $600,000 x 100 = 9%

If their earning rate is say 4%, then their money will last around 15 years.

Tips to ensure our calculator has as much relevance as possible

  • If you want your retirement income to increase with inflation, you can take that into account by subtracting the expected rate of inflation from the earning rate of your investments. We expect inflation to average around 3% p.a., so if your investments earn on average say 7% p.a., then you would select 4% as your ‘real’ earning rate.
  • If you will qualify for the Centrelink Age Pension you shouldn’t include it when you calculate your drawdown rate. For example, let’s say a homeowner couple aged 65 has $400,000 in savings which earns 7% p.a., (that’s about 4% after inflation) and they require $42,000 a year income. They should initially qualify for age pension of around $22,000 p.a. (indexed). So, to calculate the life expectancy of their retirement savings, they should use a drawdown rate of 5% (i.e. [$42,000 less $22,000] ÷ $400,000 x 100). Given the real earning rate of 4%, this means their savings should last about 41 years.

Of course, our ‘Money Life Calculator’ is just a guide. To accurately assess the life expectancy of your retirement savings you should talk with the team at BJT Private.

We have access to a sophisticated software system which takes into account all of the variables and calculates taxation and Centrelink benefits each year of your retirement.

Strategies to help you stretch the life expectancy of your retirement savings

  • Increase your contributions to super before you retire (including using the ‘Transition to Retirement’ rules to create additional tax advantages)
  • Arrange your finances so you pay no tax in retirement
  • Increase the return you generate on your investments
  • Arrange your finances to qualify for higher Centrelink benefits
  • Retire later
  • Work part-time in retirement
  • Lower your income requirement in retirement
  • Sell your home for a less expensive home
  • Decide to leave less or nothing to your estate

For the majority of retirees, the most appropriate solution usually involves many strategies. As your financial adviser we will be pleased to model different scenarios for you to ensure the right combination of strategies is employed for your situation and lifestyle needs.

Luke Sheehan is an Authorised Representative of Australian Unity Personal Financial Services (AUPFS) ABN 26 098 725 145, AFSL 234459. This information has been prepared by AUPFS.

This information has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person. Because of this you should, before acting on it, consider its appropriateness, having regard to your objectives, financial situation and needs.