What does a ‘comfortable’ retirement look like?

As the end of working life approaches one of the main challenges an individual or couple will face, is forecasting how much money they will need to secure a comfortable and fulfilling lifestyle in retirement. The uncertainty of what your future needs will be, as well as the length of time your funds will need to last, can make the process seem overwhelming and concerning. There are, however, a few useful questions you can begin asking yourself now to help place you in the best position to start planning.

How much money will I (and my partner) need for a ‘comfortable’ retirement?

How long is a piece of string?

While a challenging question to answer considering the various ‘ideal’ retirement scenarios for individuals, experts such as the Association of Superannuation Funds of Australia (ASFA) recommend that ‘retirees should assume up to 67% (or two-thirds) of annual pre-retirement income’ is required in order to maintain their current lifestyle, as overall expenses are generally reduced in retirement (excluding healthcare costs and assuming you own your own home)[1].

While this may seem a high number to maintain, it is important to remember that the 67% is a guideline – a starting point to begin the planning process. For example, some retirees, depending on their pre-retirement income, may need less. A retiree making $200,000 may only need 50% of their income to qualify for what is generally considered to be a comfortable post-working life. Retirees should use their own individual circumstances, anticipated lifestyle, and health expectations to revise this number in order to generate a more relevant estimate of expenses[2]. It is also important to note that the 67% guideline will fluctuate depending on lifestyle changes throughout various retirement stages. For example, retirees tend to travel more frequently in early retirement and thus may need to allocate closer to 80% of their pre-retirement income, vs. later down the track where they may seek a less active lifestyle.

ASFA has tracked the evolving lifestyle of the average Australian retiree over the past 16 years, compiling their findings into ‘The Retirement Standard’.  This report focuses on two key areas:

  • The minimum annual cost of a comfortable lifestyle, modest lifestyle, and aged pension.
  • What a modest and comfortable lifestyle looks like against the aged pension
Comfortable Lifestyle


(total per year)

Modest Lifestyle
(total per year)
Age Pension
(total per year)
Housing ongoing only$128.37$133.94
Household goods & services$82.45$101.52
Total per week$924.64$1,302.95
Total per year$48,266$68,014

Projections assume that the retiree(s) are aged around 65, relatively healthy, own their own home and relate to expenditure by household. (September quarter 2022, national)

How long will my retirement funds need to last?

Thanks to advances in medical science and a rise in living conditions, ‘population ageing’ is happening at faster pace than ever before – people are simply living longer[3]. In Australia specifically, life expectancy has increased at a steady pace over the last century[4] –

  • Life expectancy at birth in 1990 was 73.9 years for males and 80.1 years for females
  • Life expectancy at birth in 2018-20 was 81.2 years for males and 85.3 years for females


As we enjoy longer lives, retirees are increasingly looking forward to comfortable, meaningful and ‘active’ retirements. Yet, it is worth thinking about the standard of living you expect at all stages of the retirement journey.

While the budgeting process for living expenses in retirement for items such as groceries, utilities, transportation etc., may be seemingly straightforward, the unpredictability of living longer (sometimes by an additional 10 or 20 years) and the increased potential for substantial health related costs and aged care, can greatly complicate the retirement budgeting process. Longevity risk can derail plans some retirees may have to live with their children once they are no longer able to independently finance or physically care for themselves. Retirees may end up needing treatment for chronic illness or requiring more support than their children or grandchildren can provide. The financial burden of ageing-in-the-home care packages and in-home support or moving to a residential aged care facility could fall very unexpectedly to family members.

What do I need to do now to ensure a Comfortable Retirement? And how can the Equity Preservation Mortgage™ help me?

The family home will often be the largest single asset an individual will own. It is of no surprise then that many retirees will consider using their most valuable asset to help fund their retirement lifestyle.

  • Should I sell my house, relocate or downsize to afford the retirement I want?
  • Do I need to take out a reverse mortgage?
  • How do I maintain 67% of my pre-retirement income once I sell?


The decision to sell the family home to downsize and hoping for the best that remaining funds will last the distance is not a plan – it is a recipe for financial disaster. Unfortunately for retirees, there have not been any viable or fiscally responsible options to turn to.

In response to this problem, the team at Futureproof, working alongside one of the foremost, global thought leaders and technology services groups, have designed the Equity Preservation Mortgage™ initially due for release in late 2022 in Australia and United Kingdom. The Equity Preservation Mortgage™ monetizes the capital in the home to provide a sustainable stream of annuity income, without any depletion of home equity – all tax free. Retirees (and pre-retirees) will be able to retain home ownership, preserve existing equity and allow the property to continue appreciating to enable them to access their growing pool of home capital later, as needed.

At the end of the day, everyone’s idea of what a comfortable retirement looks like will differ. No one single retirement plan or investment strategy will perfectly fit individual circumstances. Yet ALL retirees will need to base their decisions on their ability to finance every phase of retirement life. Being mindful of changes in spending habits at each life stage, planning for transition to residential aged care and discussing plans with family members well in advance, are just a few ways retirees can achieve the funded retirement lifestyle they envisioned. However, with the soon-to-be-launched, revolutionary Equity Preservation Mortgage™, home-owning retirees can look forward to an easier, more effective solution.

[1] https://www.superannuation.asn.au/resources/retirement-standard

[2] https://www.fidelity.com/viewpoints/retirement/spending-in-retirement

[3] https://www.who.int/news-room/fact-sheets/detail/ageing-and-health

[4] https://www.abs.gov.au/statistics/people/population/life-tables/latest-release