Sarah checks her super balance every Monday morning. $687,432.
It was $691,208 last week. Down $3,776. Her stomach tightens.
“Am I ready? Do I have enough? What’s the magic number?”
She’s 61, living in Balmain, and desperately wants to retire. But every time she looks at her super balance, she feels like she’s missing something. Some critical threshold she hasn’t hit yet.
Here’s the truth Sarah doesn’t know: She’s asking the wrong question.
Your retirement number – the amount you need to retire comfortably – isn’t what you think it is. Most Balmain pre-retirees are fixated on their super balance when they should be focused on something completely different.
As a Balmain financial planner, I have this conversation almost daily. And once people understand what their retirement number actually means, everything changes.
Let me show you why your retirement number probably isn’t what you think – and what it actually should be.
“Your Retirement Number Isn’t What You Think”
“How much do I need in super to retire?”
This is the question. Everyone asks it. Financial magazines write articles about it. Your mates debate it at the pub.
And it’s fundamentally the wrong question.
Because it assumes your retirement number is a lump sum. A balance. A pile of money sitting in your super account.
But that’s not how retirement actually works.
When you ask “how much do I need in super,” you’re treating your retirement like a tank of petrol.
Fill it up. Drive around. Watch the gauge drop. Hope it lasts until… well, until you die.
That’s the lump sum mindset. And it creates Fear of Running Out (FORO) because you’re constantly watching your balance decrease.
“I have $700,000 in super. I spend $50,000 per year. Simple division: 700,000 ÷ 50,000 = 14 years. My super lasts 14 years. Then what? I’m only 62 now. I could live to 95. I need way more money!”
This calculation is everywhere. And it’s terrifying people unnecessarily.
Because it’s wrong.
The “divide your balance by annual spending” calculation ignores three massive factors:
Your $700,000 isn’t sitting in a vault gathering dust. It’s invested. Earning returns. Generating income.
Even a conservative portfolio earning 5-6% annually produces $35,000-$42,000 in income each year. That income offsets your spending.
So you’re not drawing down $50,000 from a static $700,000. You’re drawing $50,000 while your investments generate $35,000+. The net drawdown is much smaller.
Most Australians qualify for at least a part Age Pension. Even if you have $700,000 in super and own your home, you might receive $15,000-$20,000 annually from the government.
That Age Pension isn’t in your super balance. But it’s part of your retirement income.
If you ignore it in your calculations, you’ll think you need way more super than you actually do.
Research consistently shows retirees spend less as they age. You might spend $55,000/year at 65. By 75, it’s probably $45,000. By 85, maybe $35,000.
Travel decreases. Energy levels change. Lifestyle naturally moderates.
The simple division assumes constant spending for 30 years. That’s not realistic.
Your retirement number isn’t a lump sum balance.
Your retirement number is your annual income requirement.
Not “how much do I have?” but “how much do I need per year to live comfortably?”
This is the fundamental shift in thinking that changes everything.
Balance-focused thinking: “I need $1 million in super.”
Income-focused thinking: “I need $55,000 per year to live comfortably.”
See the difference?
The first is a static target that may or may not be achievable. The second is a specific income goal you can plan around.
Let me show you why the income question is more useful.
John, 63, has $900,000 in super. Sounds great, right? He’s 90% of the way to that mythical million.
But his super is invested in speculative growth stocks that pay minimal dividends. His annual income from super: $15,000.
He needs $60,000/year to live. Even with a part Age Pension of $12,000, he’s $33,000 short annually. He’ll have to constantly sell shares – potentially at bad times – to fund his lifestyle.
Big balance. Insufficient income. Stressful retirement.
Marie, 63, has $650,000 in super. She’s nowhere near a million. She should be panicking, right?
But her super is structured to generate income. Dividend-paying shares, property trusts, infrastructure investments. Annual income from super: $36,000 (5.5% yield).
She needs $55,000/year to live comfortably. With her part Age Pension of $17,000, her total annual income is $53,000. Close enough.
Smaller balance. Adequate income. Comfortable retirement.
Marie is fine. John is struggling. Despite John having $250,000 more in super.
“Income for Life vs Capital Gains: Which Strategy Works Best?”
Here’s the framework I use with every Balmain pre-retiree to find their real retirement number:
What do you actually spend per year? Not what you think you spend. What you actually spend.
Track it for 3 months. Multiply by 4. Adjust for retirement changes:
For most Balmain couples I work with, the real number is $55,000-$70,000/year. For singles, $40,000-$50,000.
That’s your retirement number. Not a million dollars. Not $800,000. A specific annual income: “$62,000/year.”
Now list every source of retirement income:
Add them up. That’s your total annual retirement income.
Annual costs (Step 1) vs Annual income (Step 2)
If income ≥ costs: You’re ready. Your retirement number is sorted.
If income < costs: Calculate the gap. Figure out how to close it (more super contributions, delay retirement slightly, reduce spending, part-time work).
Notice what we didn’t do: obsess over your super balance.
“Your Retirement Number Isn’t What You Think”
Let me walk you through a real example (details changed for privacy).
Tom and Lisa, both 62, living in Balmain. Combined super: $680,000. Home paid off.
They came to me stressed: “We’re $320,000 short of a million. We can’t retire.”
Here’s what we discovered:
Total: $62,000/year
Total: $78,860/year
They need $62,000. They have $78,860 coming in.
Their retirement number? Not “a million dollars.” It was “$62,000/year.” And they already had it covered.
Tom and Lisa retired three months later. They’re now 64, travelling regularly, and completely comfortable.
They spent two years stressed about a number that didn’t even matter.
When you shift from “how much do I have” to “how much income do I generate,” several things happen:
Your balance might drop 20% in a crash. Scary to watch. But if your income only drops 10-15%, you can ride it out. You’re not forced to sell at the worst time.
Instead of dismissing it as “unreliable,” you factor it into your income planning. Even a part pension is worth $15,000-$20,000/year – equivalent to having an extra $300,000-$400,000 in super.
No more “just need another $100k” or “when I hit $900k I’ll feel ready.” You know exactly what income you need, and whether you can generate it.
Instead of vague anxiety about “not having enough,” you have specific numbers: “I need $58,000/year. I currently generate $52,000. I need to close a $6,000 gap.”
That’s solvable. A vague fear of “not having enough” isn’t.
Yes, but it’s derived from your income need, not plucked from thin air.
If you need $40,000/year in super income, and you’re targeting a 5% sustainable yield, you need roughly $800,000 in super.
But $800,000 is not “the number.” It’s just the tool to generate your real number: $40,000/year.
If you’re living sustainably off income, your balance should be relatively stable over time (accounting for market fluctuations).
If it’s consistently dropping, you’re drawing too much. Adjust spending or work a bit longer. But you’ll know this in real-time rather than guessing at 62 whether you’ll run out at 85.
No. It fundamentally changes how you think about retirement.
Balance-focused: “Do I have enough?” (anxious, unclear)
Income-focused: “Can I generate $55,000/year sustainably?” (concrete, answerable)
One creates FORO. The other creates confidence.
If you’re sitting in Balmain right now wondering if you have enough, do this:
It’s creating anxiety without useful information. Check it quarterly at most.
What do you actually need per year? Be honest. Include everything. Adjust for retirement changes.
Super income, Age Pension, part-time work, rental income. Add them up.
Do you have a surplus, a small gap, or a large gap? That tells you if you’re ready, almost ready, or need more time.
If you’re close to retirement, shift your super toward income-generating investments. Dividend shares, property trusts, infrastructure. Focus on yield, not just growth.
Your retirement number isn’t what you think.
It’s not $1 million. It’s not $800,000. It’s not any specific lump sum.
Your retirement number is your annual income requirement. For most Balmain pre-retirees, that’s $55,000-$70,000/year for couples, $40,000-$50,000 for singles.
Once you know that number, you can figure out how to generate it. And once you know you can generate it sustainably, you’re ready to retire.
Stop obsessing over your balance. Start focusing on your income.
That’s the shift that changes everything.
Stop guessing about lump sum targets. Get clarity on your actual retirement income number.
For $660 (inc GST), your One Page Financial Plan shows you:
✓ Your real annual income requirement (not generic estimates)
✓ All your income sources mapped and totaled
✓ Whether you’re ready now, almost ready, or need more time
✓ How to structure your super for sustainable income
✓ 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.