Retirement Income Gap Calculator
See how much income your super and Age Pension will generate at retirement — and how large a gap remains versus your target lifestyle.
Age Pension estimate uses 2025–26 assets test (homeowner thresholds). Super projected at 7% p.a. with 12% SG. Figures are estimates only.
Understanding Your Retirement Income Gap
What Is a Retirement Income Gap?
A retirement income gap is the difference between what your projected retirement savings and entitlements will generate each year, and the lifestyle income you actually want. For most Australians, some gap exists — particularly those targeting a comfortable rather than modest retirement. Understanding the size of your gap early gives you time to close it through additional contributions, salary sacrifice, or adjusting your planned retirement age. This calculator estimates your gap by combining your projected superannuation drawdown income with an estimated Age Pension entitlement.
How the Age Pension Works as a Safety Net
The Age Pension is available from age 67 and provides a crucial income floor for millions of Australians. The maximum single rate is around $26,500 per year and around $40,000 for couples combined (2025–26). However, both an income test and an assets test apply, and if your super balance is substantial, your pension will be reduced or eliminated. The assets test taper rate is $3 for every $1,000 of assets above the threshold — so a $400,000 balance above the homeowner threshold cuts your annual pension by $1,200. Understanding this interaction is essential for retirement planning.
ASFA Retirement Standard Benchmarks
The Association of Superannuation Funds of Australia (ASFA) publishes quarterly benchmarks for retirement living costs. For 2024–25, a comfortable retirement is estimated at approximately $51,000 per year for a single person and $72,000 for a couple. A modest retirement — better than the Age Pension alone but with limited discretionary spending — costs around $32,000 for a single person. These figures assume you own your home outright. Renters in retirement face considerably higher expenses, making the income gap larger and more urgent to address.
Why Most Australians Will Have Some Gap
Despite compulsory super since 1992, many Australians will not accumulate sufficient balances for a fully self-funded retirement at a comfortable standard. Career breaks, part-time work, lower super rates in earlier years, and fees all reduce balances. The most effective levers to close a retirement income gap include: starting extra contributions earlier, making salary sacrifice contributions during peak earning years, reducing planned retirement spending, working a few extra years, and maximising catch-up contributions if you have a super balance below $500,000.
Super vs Other Income Sources in Retirement
Super is the primary retirement savings vehicle in Australia but is not the only one. Many retirees supplement super drawdowns with income from investment properties, share portfolios, bank interest, and — where eligible — the Age Pension. Downsizing your home can release equity that can be contributed to super as a downsizer contribution (up to $300,000 per person from age 55). Part-time work in the early retirement years is also increasingly common and can significantly reduce the pressure on a super balance.
Frequently Asked Questions
The ASFA Retirement Standard estimates a comfortable lifestyle for a single homeowner costs around $51,000 per year and $72,000 for a couple. To self-fund at $51,000 using the 4% rule, you need approximately $1,275,000. With partial Age Pension support, ASFA benchmarks the required super balance at around $595,000 for singles and $690,000 for couples. Your personal target depends on your lifestyle, whether you own your home, and other income sources.
The Age Pension is available from age 67 for everyone born on or after 1 January 1957. You must also meet Australian residency requirements and pass both an income test and an assets test. The maximum rate (2025–26) is approximately $26,500 per year for a single person and $40,000 per year combined for a couple.
The ASFA Retirement Standard is a quarterly benchmark published by the Association of Superannuation Funds of Australia. It estimates the annual budget required for a modest or comfortable retirement lifestyle, covering housing (assuming home ownership), food, health, transport, and leisure. It is the most widely used benchmark for retirement planning in Australia and is updated quarterly for inflation.
The assets test reduces the Age Pension by $3 per fortnight for every $1,000 of assets above the lower threshold. For 2025–26, the lower threshold for a single homeowner is approximately $314,000. Above around $686,000 in assets, a single homeowner receives no pension. Superannuation balances count as assessable assets once you reach Age Pension age. Your primary residence is exempt from the assets test.
Yes. The government's Home Equity Access Scheme allows eligible Australians to draw equity from their home as a fortnightly payment, with interest accruing. Downsizing is another option — selling the family home and contributing proceeds to super via the downsizer contribution rules (up to $300,000 per person from age 55, no work test). Private reverse mortgages are also available but typically come with higher interest rates and stricter terms.