By Paul Feeney, Founder and Chief Executive Officer, Otivo
How long will it last is the question that keeps retirees up at night, and the frustrating truth is that there's no single answer, only a range. The same balance can last fifteen years or thirty depending on how fast you draw it, how markets behave, and how long you live. But the range isn't a mystery. A handful of factors decide it. Here's what moves the number.
Quick answer
How long your retirement savings last depends on your balance, how much you withdraw each year, the returns you earn, and how long you live. Drawing less and earning steady returns stretches it, while high withdrawals or a poor run of early returns shortens it. The Age Pension can also extend how long your own savings need to stretch.
What determines how long your savings last?
Four dials do most of the work, your starting balance, how much you withdraw each year, the returns your investments earn, and how long your retirement runs. Turn down withdrawals or turn up returns and the money stretches further, turn them the other way and it shrinks. The reason there's no single answer is that these dials interact, and small differences in each compound over a retirement that can last decades. Understanding the four is what turns a vague worry into something you can actually estimate.
How much difference does the withdrawal rate make?
More than almost anything else you control. Drawing a little less each year doesn't just save that amount, it leaves more invested to keep earning, so the effect builds over time. The gap between a modest and a heavy withdrawal rate can be the difference between savings lasting comfortably and running short a decade early. Because it's one of the few dials fully in your hands, the withdrawal rate is usually the first place to look.
How do investment returns affect the timeline?
Returns decide how hard your remaining balance works while you draw on it, and the timing matters as much as the average. A strong early run gives your savings momentum, while a poor run early on, when you're also withdrawing, does lasting damage because there's less left to recover. That timing effect, known as sequencing risk, is why two retirees with the same average return can see their money last very different lengths of time depending on when the good and bad years fell.
How does the Age Pension change the picture?
It acts as a backstop that quietly strengthens as your own savings decline. Because the Age Pension is means-tested, drawing down your assets over time can increase your entitlement, so for many retirees the pension picks up more of the load in the later years. That means your own savings often don't have to fund your entire retirement single-handedly, which can meaningfully extend how long they realistically need to last. Services Australia sets the tests that determine entitlements.
How can you estimate your own number?
Because the four dials interact, this is genuinely hard to do in your head, which is where a projection earns its place. A good estimate combines your balance, planned withdrawals, expected returns and likely lifespan, and it gives you a range rather than a false-precision single date. For someone like a 65-year-old with $400,000 weighing how much to draw, seeing that range is what makes the decision concrete instead of anxious.
Frequently asked questions
How long will $500,000 last in retirement?
It depends on how much you withdraw, the returns you earn and how long you live, so the honest answer is a range rather than a figure. Age Pension support can also stretch it further. A projection based on your own numbers gives the clearest estimate.
Will my super last my whole retirement?
There's no guarantee, since an account-based pension lasts as long as its balance does. Sustainable withdrawals, steady returns and the Age Pension as a backstop all help, but the outcome depends on how the four dials play out.
What happens when my super runs low?
As your assessable assets fall, your Age Pension entitlement may rise, so the pension tends to carry more of your income in the later years. That backstop is why many retirees don't rely on super alone for their whole retirement.
Where to from here
The answer is a range you can shape, not a fixed date you're stuck with. Otivo, a licensed Australian financial advice platform holding AFSL and Australian Credit Licence No. 485665, offers a retirement planning module that estimates how long your savings could last, based on your balance, drawdown, age and Age Pension eligibility. It replaces the midnight worry with a number you can plan around.
Sources
- ASIC MoneySmart — how long will your retirement savings last — moneysmart.gov.au
- Services Australia — Age Pension income and assets tests — servicesaustralia.gov.au
- Association of Superannuation Funds of Australia — ASFA Retirement Standard — superannuation.asn.au
Disclaimer
The information in this communication is current as at July 2026 and has been prepared by Otivo Pty Ltd ABN 47 602 457 732, AFSL and Australian Credit Licence No. 485665. This content is general information only and has been prepared without taking into account your objectives, financial situation or needs. It is not personal financial or taxation advice and should not be relied on as such. Before acting on any information, you should consider its appropriateness having regard to your personal circumstances. This material must not be reproduced in whole or in part, or posted on any social media platform, without the prior written consent of Otivo Pty Ltd.