Here’s the conversation I have at least three times a week with Balmain locals:
Them: “I’ve got $650,000 in super. Is that enough to retire?”
Me: “Enough for what?”
Them: “You know… to retire. To live on. Is it enough?”
Me: “How much do you need to live each year?”
Them: “Um… I’m not sure. Maybe $60,000? $70,000? I haven’t really worked it out.”
And there’s the problem.
You’re stressing about whether you have “enough” saved, but you haven’t actually calculated what “enough” means. You’re asking if $650,000 is sufficient without knowing what it needs to be sufficient for.
It’s like asking “Is 50 litres of petrol enough?” without saying where you’re driving.
Let me show you how to actually calculate your real retirement income – the number that determines whether you can retire comfortably or need to keep working.
Your super balance is just a number on a screen. What matters is: How much can that balance generate in annual income?
Two people with $700,000 in super can have wildly different retirement experiences depending on how their money is invested:
Person A: Invested in growth assets, generating $25,000/year in income. They’ll need to sell assets constantly to make up the shortfall.
Person B: Invested in income-producing assets, generating $45,000/year. Combined with Age Pension, they’ve got $65,000/year without selling anything.
Same super balance. Completely different income. Completely different retirement.
“Your Retirement Number Isn’t What You Think”
So let’s stop obsessing over your total balance and start calculating the only number that actually matters: Your annual retirement income.
Here’s the framework I use with every Balmain client. It takes 15 minutes and gives you absolute clarity on whether you can retire or what needs to change.
First, figure out what you actually spend. Not what you “should” spend. Not what ASFA says. What do YOU actually need to live comfortably?
Essential expenses:
Lifestyle expenses:
Example – Sarah and John, Balmain homeowners:
Total annual living costs: $59,600
That’s their number. Not ASFA’s number. Not some internet calculator’s number. Theirs.
Next, figure out how much annual income your super can reliably generate.
For income-focused portfolios (dividend shares, income funds, rental properties), a reasonable sustainable income rate is about 6% of your super balance.
Formula: Super Balance × 0.06 = Annual Super Income
Sarah and John’s calculation:
Important note: This assumes your super is invested in income-producing assets (dividend-paying shares, income funds, etc.). If your super is mostly in growth assets, your sustainable income will be lower – maybe 3-4%. This is why investment strategy matters enormously.
Most Australians ignore the Age Pension when planning retirement. This is a huge mistake.
Even a part Age Pension can add $15,000-$20,000 to your annual income. That’s like having an extra $300,000-$400,000 in super generating income – except it’s guaranteed, indexed to inflation, and paid for life.
Use the government’s Age Pension calculator to estimate your entitlement:
Sarah and John’s Age Pension:
Now add it all up:
Super Income + Age Pension + Any Other Income = Total Annual Retirement Income
Sarah and John’s total income:
Total annual retirement income: $57,000/year
Now comes the moment of truth. Compare your annual costs to your annual income:
Sarah and John’s gap analysis:
That’s it. That’s the gap. Not some vague anxiety about “not having enough.” An actual, specific number: $2,600/year.
And here’s the beautiful thing: When you know the exact gap, you know exactly what needs to change. Sarah and John don’t need to work another five years. They don’t need to “save more.” They need to find $2,600/year – which they can do by:
All of these are manageable. None require working another decade. Because the gap is tiny – they just didn’t know that until they ran the numbers.
When I walk clients through this four-step process, something shifts. The anxiety eases. The fear of the unknown disappears.
Why? Because you’ve replaced vague worry with specific numbers.
Before: “Do I have enough? I don’t know. Maybe? I hope so?”
After: “I need $62,000/year. I can generate $58,000/year. I have a $4,000 gap. Here are three ways to close it.”
See the difference? One is FORO (Fear Of Running Out). The other is a solvable problem.
“Your Retirement Number Isn’t What You Think”
Let me show you how powerful this income calculation is with two real examples from my Balmain clients (names changed).
Client 1: David, 62, $850,000 super
David came to me convinced he needed to work until 67. He’d read online that you need $1 million to retire, and he was still $150,000 short.
We ran the income calculation:
Solution: David could easily cover that $5,000 by doing one day a week consulting for the first few years of retirement. He retired at 63, not 67. Four extra years of freedom – all because he calculated income instead of obsessing over his balance.
“The $1 Million Retirement Myth”
Client 2: Maria, 59, $520,000 super
Maria thought she was nowhere near ready to retire. Her super balance was “only” $520,000 – well short of that mythical million.
Her calculation:
Maria had enough. Right now. Not in 8 years. Today.
She thought she needed another $480,000. She actually needed $0. The calculation showed her the truth.
Once you’ve run your own calculation, you’ll land in one of three scenarios:
Scenario 1: You have a surplus (income exceeds costs)
Congratulations – you can retire now if you want to. Your job is to protect and maintain your income sources. Don’t let anyone talk you into “growth strategies” that sacrifice reliable income for potential capital gains.
Scenario 2: You have a small gap (less than $10,000/year)
This is easily fixable. Options:
Scenario 3: You have a large gap (more than $15,000/year)
This requires a proper strategy. You need to either:
At least now you know exactly what the gap is and can make an informed decision about how to close it.
You can do this calculation yourself using the framework above. But here’s what most people miss:
That’s where a One Page Financial Plan comes in. We run these exact numbers – properly – and show you exactly where you stand.
For $660 (inc GST), you get:
✓ Your precise annual retirement income calculation
✓ Your exact gap (if any) and what it means
✓ Specific strategies to close any shortfall
✓ Clear answers on whether you can retire now or what needs to change
✓ 100% satisfaction guaranteed
📧 Email: adam@suncow.com.au
📞 Phone: 0418 785 200
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Information provided by Suncow Wealth is general in nature and does not take into consideration your personal financial situation. It is for educational purposes only and does not constitute formal financial advice. Remember, the value of any investment can go down as well as up. Before acting, you should consider seeking independent personal financial advice that is tailored to your needs. Suncow Wealth Pty Ltd is a Corporate Representative No.441116 of AFSL 342766.