Retirement Budget Calculator: Is $5000/month Enough?
Calculate if $5000 a month is enough for your retirement in Australia. This tool helps you understand if your income matches your expected costs based on current 2025 prices.
Can you live well on $5000 a month in retirement? It sounds like a lot-until you look at what that actually buys you in 2025, especially in Australia. For many, $5000 a month feels like a dream. For others, it’s barely enough. The truth? It depends on where you live, how you spend, and what kind of life you want to keep after you stop working.
What $5000 a Month Really Buys in Australia
Let’s start with the basics. $5000 a month is $60,000 a year. That’s more than double the average superannuation balance at retirement for Australians over 65, which is around $280,000 according to the Australian Securities and Investments Commission. But income isn’t the same as savings. If you’ve got $60,000 coming in each year from pensions, investments, or super, you’re already ahead of most.
Here’s what that $5000 covers in Sydney, Melbourne, or Brisbane in 2025:
- Housing: If you own your home outright, this is your biggest win. No mortgage means $1500-$2500 a month stays in your pocket. If you’re renting? That’s $2000-$3500 gone before you even buy groceries. Renting on $5000 a month in Sydney is tight.
- Utilities: Electricity, gas, water, internet, and phone add up to $300-$500. With more people working from home or needing medical equipment, these costs keep rising.
- Healthcare: Medicare covers basics, but not everything. Dental, glasses, hearing aids, and physiotherapy? You’re paying out of pocket. A single dental crown can cost $1200. Annual out-of-pocket medical costs for retirees average $3500-$5000.
- Food: A modest grocery budget for two people is $800-$1000 a month. Add in eating out, coffee, snacks, and special diets (like low-sodium or diabetic-friendly foods), and you’re at $1200+.
- Transport: If you own a car, insurance, registration, fuel, and maintenance cost $500-$800 a month. Public transport is cheaper, but not always practical if you live outside the city or need to visit family regularly.
- Leisure and travel: A weekend getaway, a cruise, visiting grandkids across the country-these aren’t luxuries, they’re part of a fulfilling retirement. $500-$1000 a month for this is realistic.
That’s $4500-$5500 already. No wiggle room. No emergency fund. No unexpected costs. One hospital stay, a broken water heater, or a car repair could wipe out your monthly buffer.
How Much Do Most Australians Retire With?
The average Australian retires with a super balance of about $280,000. If they withdraw that over 20 years with a 4% annual drawdown (a common rule of thumb), they get around $11,200 a year-or $930 a month. That’s less than one-fifth of $5000.
Centrelink’s Age Pension tops out at about $1000 a month for a single person, and $750 each for a couple. Most retirees get a partial pension if they have other income or assets. Even with the full pension and some super, the average retiree lives on $2500-$3000 a month total.
So $5000 a month puts you in the top 15% of Australian retirees. You’re not just getting by-you’re living comfortably. But comfort doesn’t mean safety.
What’s Missing From the $5000 Picture?
Most people forget inflation. In 2025, Australia’s inflation rate is still hovering around 3.2%. That means your $5000 today will buy 15% less in five years. If your pension doesn’t increase with cost of living, you’re losing ground every year.
Also, healthcare costs don’t just rise-they explode. By age 80, the average retiree spends 3x more on medical care than they did at 65. A hip replacement, a new hearing aid, or long-term home care can cost $20,000-$50,000. If you don’t have insurance or savings set aside, that money comes out of your monthly pension.
Then there’s family. Many retirees help adult children with rent, pay for grandchildren’s school trips, or cover medical bills for aging parents. These aren’t optional. They’re emotional, not financial, decisions-and they drain budgets fast.
Can You Retire on 00 a Month? Yes. But Only If You Plan Right.
If you want to live on $5000 a month and not run out of money, here’s what you need:
- Own your home outright. No rent. No mortgage. This is the single biggest factor in making $5000 stretch.
- Have multiple income streams. Super, rental income, part-time work, dividends, annuities. Don’t rely on one source. If one stops, you’re in trouble.
- Plan for healthcare. Get private health insurance before 65. Set aside $10,000-$20,000 for medical emergencies. Don’t wait until you need it.
- Account for inflation. Make sure your super or pension has an indexation feature. If it doesn’t, you’re losing buying power.
- Build a buffer. Keep at least $20,000-$30,000 in a high-interest savings account for unexpected costs. Don’t touch it unless it’s a real emergency.
Without these, $5000 a month feels great until it doesn’t. Then you’re stuck choosing between medicine and groceries.
What If You’re Not There Yet?
If you’re 50 and only have $200,000 in super, $5000 a month isn’t realistic. But it’s not impossible. Here’s how to close the gap:
- Downsize. Sell a big house, move to a smaller one or regional area. Use the equity to top up your super. In 2025, many retirees in Perth and Adelaide are doing this and adding $200,000+ to their retirement fund.
- Work longer. Even 2-3 more years of part-time work at $20/hour adds $20,000-$30,000 a year. That’s $60,000-$90,000 extra in savings.
- Use the Downsizer Contribution. If you’re 60+, you can put up to $300,000 from the sale of your home into super-tax-free. This rule still applies in 2025.
- Delay the Age Pension. Waiting until 67 instead of 65 increases your payment by 10%. Every year you wait after 67 adds another 4%.
Real-Life Examples
Meet Margaret, 68, in Geelong. She sold her Melbourne home for $950,000, bought a $500,000 unit, and put $400,000 into super. She gets $1800 a month from Age Pension and $3200 from super withdrawals. Total: $5000. She owns her home, has no debt, and travels twice a year. She’s fine.
Now meet David, 72, in Bondi. He still has a $300,000 mortgage. His super gives him $4000 a month. He pays $2800 rent on his apartment. He spends $1200 on medical bills. He has $100 left for food and transport. He’s working part-time at a convenience store just to cover his phone bill.
Same income. Totally different outcomes.
Bottom Line: $5000 Is Good-But Not Enough If You’re Not Prepared
$5000 a month is a solid pension in Australia in 2025. It’s more than most people have. But it’s not a magic number. It’s a starting point. If you own your home, have a plan for healthcare, and avoid lifestyle inflation, you’ll be comfortable. If you don’t, you’ll be stressed.
The real question isn’t whether $5000 is enough. It’s whether you’ve built the life that lets you live on it without fear.
Is $5000 a month enough to retire on in Australia?
Yes, $5000 a month is enough to retire comfortably in Australia-if you own your home outright and have no major debt. But it’s tight if you’re renting, have high medical costs, or need to support family. Most Australians retire on less than half that amount, so $5000 puts you in the top 15% of retirees.
How much super do I need to get $5000 a month?
To withdraw $5000 a month ($60,000 a year) safely without running out of money, you’d need around $1.5 million in super or other investments. This assumes a 4% annual withdrawal rate, which is considered sustainable over a 25-30 year retirement. If you’re withdrawing more than that, you risk running out of money before you die.
Can I live on just the Age Pension and $5000 a month?
No. The full Age Pension is about $1000 a month for a single person. If you’re getting $5000 a month total, that means you’re likely drawing from super, investments, or other income sources. The Age Pension alone won’t get you anywhere near $5000. Most people who live on $5000 a month combine Age Pension with super withdrawals, rental income, or part-time work.
What happens if inflation goes up after I retire?
If your pension doesn’t increase with inflation, your buying power drops every year. In 2025, Australia’s inflation rate is 3.2%. That means your $5000 today will only buy what $4300 bought in 2020. If your super or income doesn’t adjust, you’ll need to cut back on food, travel, or healthcare. Always choose investment options that offer indexation or inflation-linked payouts.
Should I buy an annuity to guarantee $5000 a month?
An annuity can guarantee a fixed monthly payment for life, but they’re expensive and inflexible. In 2025, an annuity paying $5000 a month would cost around $1.2 million upfront. You lose access to your capital, and if you pass away early, your family gets nothing. Only consider this if you’re risk-averse, have no other income, and want certainty over flexibility.
Can I work part-time and still get the Age Pension?
Yes. You can earn up to $480 a fortnight (about $1040 a month) from part-time work and still get the full Age Pension. If you earn more, your pension reduces by 50 cents for every dollar over the limit. Many retirees work 10-15 hours a week to top up their income without losing benefits.
What’s the biggest mistake retirees make with $5000 a month?
They assume it’s enough and don’t plan for emergencies. The biggest risk isn’t running out of money-it’s running out of money because of one big expense: a medical bill, a broken roof, or helping a family member. Retirees who survive longest keep a $20,000-$30,000 emergency fund and avoid lifestyle creep.
What to Do Next
If you’re close to retirement and wondering if $5000 a month is enough:
- Run your numbers using the MoneySmart Retirement Planner.
- Get a free super review from your provider.
- Speak to a fee-only financial adviser who doesn’t sell products.
- Start downsizing now if you’re in a large home.
- Build your emergency fund-even $500 a month adds up.
Retirement isn’t about how much you have. It’s about how well you’ve planned for the unexpected. $5000 a month gives you options-but only if you’ve prepared for the costs you haven’t thought of yet.