How Much Can I Spend in Retirement? The Couple Who Finally Booked the Trip
How much can I spend in retirement? It’s the question Mark and Diane kept putting off. They’d retired within a year of each other, the mortgage was long gone, and between them they had a healthy super balance and a part Age Pension. On paper, they were doing better than most.
And yet every time the subject of the big overseas trip came up, one of them would find a reason to wait. Better to see how the year plays out. Better to wait until the market settles. Better to be sure.
Mark and Diane are an illustrative example, not real clients – but their question is one we hear from real clients most weeks: how much can I actually spend in retirement without putting everything else at risk?
Table of contents
The question that kept the trip on hold
Here’s the strange part. Mark and Diane weren’t short of money. What they were short of was permission.
After 35 years of putting money away, spending it feels like it should come with an alarm bell. Nobody rings a bell when you’re allowed to start. So a lot of retirees do the safest thing they can think of: they keep saving, out of habit, long after the saving was the point.
The result is common enough to have a name in our line of work. People retire with enough to live well, and then live smaller than they need to, because no one has ever shown them, in black and white, what “enough” actually looks like.
Where the guilt comes from
Spending guilt in retirement usually isn’t about the money. It’s about the story you’ve told yourself for decades: that a good saver doesn’t spend big, and a big number in your account is the only proof you’re safe.
That story doesn’t update itself just because you’ve stopped working. It has to be replaced with something more useful – a plan that tells you, specifically, what’s yours to spend and what needs to stay put.
Planning well: how much can I spend in retirement?
This is the part that changed things for Mark and Diane, and it’s the same three-step process we walk every client through.
Step 1: Separate the must-haves from the nice-to-haves
We worked out what their genuinely essential costs were each year – the house, the bills, the groceries, the insurance – and matched that against income they could rely on: their part Age Pension and the minimum they were required to draw from their account-based pensions each year (currently 5 per cent of the balance at age 65–74, rising with age, under the ATO’s superannuation drawdown rules). For a couple like Mark and Diane, the combined maximum Age Pension increased again from 20 September 2026, under the regular twice-yearly indexation set out by Services Australia – a reminder that this part of the income floor moves in their favour over time, not just costs.
Step 2: Check it against a real benchmark, not a guess
Rather than aiming at a number pulled from a headline, we compared their plan to ASFA’s Retirement Standard, the most widely used industry benchmark for what a comfortable or modest retirement actually costs. As at the June 2026 quarter, ASFA puts a comfortable lifestyle for a couple who own their home at around $78,998 a year, and a modest lifestyle at around $52,690 a year. Mark and Diane’s essentials plus a genuinely comfortable travel and lifestyle budget landed close to the comfortable figure – which meant the plan wasn’t guesswork, it was arithmetic.
Step 3: Build in a buffer and a yearly check-in
We set aside a cash buffer so a bad year on the markets never forces a decision they’d regret, and agreed to revisit the numbers every year – because confidence that isn’t checked tends to quietly erode.
Living large: what changed once the numbers were clear
Nothing about Mark and Diane’s balance changed. What changed was that they could finally see the difference between money that had to stay put and money that was theirs to enjoy.
They booked the trip. Not the cut-down version they’d been quietly planning as a compromise – the actual trip, the one they’d been talking about since Mark’s last day of work. They came back and told us it was the first holiday in years they hadn’t mentally priced against “what if.”
In their words
“We didn’t need a bigger number. We needed someone to tell us, properly, that the number we had was enough – and then to check our working. That’s the bit we couldn’t do for ourselves.” Diane, illustrative client story.
Our view: key takeaways
Retirement guilt is usually a leftover habit, not a real problem with the numbers – the two need to be told apart before you can fix either one.
How much can I spend in retirement? Usually more than guilt lets you believe – once the plan and numbers say so.
Work out your essentials first, and match them against income you can rely on, including your Age Pension entitlement if you qualify for one.
Use a recognised benchmark like the ASFA Retirement Standard to sense-check your lifestyle budget, rather than picking a number out of the air.
Keep a cash buffer so a market wobble never forces a bad decision.
Revisit the plan every year. Confidence holds up best when it’s checked, not just assumed.
If the fear of running out is part of what’s holding you back, our article on conquering FORO, the fear of running out in retirement is a good companion piece. And if you’d like your own numbers checked properly, that’s exactly what our retirement planning work is for.
How much can I spend in retirement without running out of money?
FAQs
It depends on your essentials, your assets, and how long your money needs to last – there’s no single figure that fits everyone. A good starting point is to compare your planned lifestyle against the ASFA Retirement Standard , or use Moneysmart’s guide to working out how much you need to retire, then stress-test it against a longer-than-average lifespan and a market downturn.
Spending itself doesn’t reduce your pension – what matters is the value of the assets and income you hold, which are assessed under the assets test and income test. Drawing down savings to spend on lifestyle can sometimes increase your pension over time, since it reduces your assessable assets. Services Australia sets and reviews these rules, and rates are indexed each March and September.
Yes !! it’s one of the most common feelings we see, especially in people who spent decades being disciplined savers. It doesn’t mean the spending is unsafe. It usually means nobody has shown the numbers clearly enough yet.
A well-built plan is stress-tests against both. That’s what the essentials-first approach and a cash buffer are for – they mean a bad year, or a long life, doesn’t undo the plan.
Ideally as you approach retirement, so the plan is built before old saving habits harden into permanent underspending. It’s equally worth doing a few years into retirement if you’ve never had the numbers checked, as Mark and Diane’s story shows – this is exactly the kind of fine-tuning our work with clients already in retirement focuses on.
Plan well. Live large.
Centaur Financial Services is a Gold Coast financial planning practice helping professionals, retirees, business owners, and investors make confident wealth decisions. Based in Robina and serving clients across Australia, we’re proud to be one of Australia’s most awarded advice firms. We specialise in retirement planning and back it with institutional-grade investment capability.
This article is general information only. It does not take into account your personal objectives, financial situation or needs. Centaur Financial Services Pty Ltd is a Corporate Authorised Representative (CAR No. 342372) of Abundant Wealth Partners Pty Ltd, ABN 35 680 570 487, AFSL 564749. Please obtain personal advice before acting on any of this content.
