How the Retirement Savings Goal Calculator Works (With a Worked Example)
Estimates the lump sum you need at retirement to fund your spending. This guide walks through what each input means, the formula behind the answer and a worked example using typical Australian figures. You can follow along in the free Retirement Savings Goal Calculator.
Why it matters
Superannuation is Australia’s compulsory retirement savings system. Employers pay the super guarantee into your fund, contributions are taxed concessionally, and the money is generally preserved until you reach preservation age and retire. Small changes to contributions, fees or investment returns compound over decades.
What you need to enter
The calculator asks for 3 inputs. The table shows each one with the example value used later in this guide.
| Input | Example value |
|---|---|
| Annual retirement spending ($) | 60000 |
| Years in retirement | 25 |
| Return in retirement (%) | 5 |
The formula
Lump sum = spending × (1 − (1 + r)^−years) ÷ r, the present value of an annuity.
Worked example
Entering the example values above gives these results:
| Result | Value |
|---|---|
| Lump sum needed at retirement | $845,636.67 |
The headline figure is $845,636.67 (lump sum needed at retirement). Change any input in the calculator and every result updates instantly, so you can test different scenarios side by side.
How the lump sum needed at retirement changes with annual retirement spending
The table below keeps every other input at the example value and moves only “Annual retirement spending ($)” up and down by 10% and 20%. It shows how sensitive the lump sum needed at retirement is to that one figure.
| Annual retirement spending ($) | Lump sum needed at retirement |
|---|---|
| 48,000 | $676,509.34 |
| 54,000 | $761,073.01 |
| 60,000 | $845,636.67 |
| 66,000 | $930,200.34 |
| 72,000 | $1,014,764.01 |
At 48,000 the result is $676,509.34; at 72,000 it is $1,014,764.01. If a small change in this input moves the answer a lot, it is worth double-checking that figure before you rely on the result.
A practical tip
Many retirees also receive a part Age Pension, which reduces the lump sum they need. This calculator assumes no pension.
Keep going
Before relying on the number, read Getting the Most From a Retirement Savings Goal Calculator: Tips and Common Errors. You might also find these guides useful:
- Super Contributions Tax Calculator: Formula, Example and What the Result Means
- Using a Concessional Contributions Cap Calculator in Australia: A Step-by-Step Guide
- Super Co-contribution Calculator Explained for Australians
Frequently asked questions
- Are the projections guaranteed?
- No. Investment returns vary from year to year. Treat projections as a guide for planning, not a forecast.
- What is the super guarantee rate?
- It is 12% of ordinary time earnings from 1 July 2025.
- Should I get advice?
- For decisions like salary sacrifice, contribution strategies or retirement income, a licensed financial adviser can look at your full situation. This site provides general information only.
Run your own numbers in the Retirement Savings Goal Calculator.
Open the calculatorGeneral information only. Rates and thresholds change, usually on 1 July. Confirm current figures with the ATO or the relevant authority, and get personal advice for decisions about your situation.