Your super isn't really a lump sum — it's an income machine. The question isn't "how big is my balance," it's "what yearly income will it pay me, and for how long?" For a target like $120,000/year, there are two ways to size it:

Aim for "never run out" if you possibly can — it's the genuinely sustainable one. You can't outlive it, it rides out bad market years instead of being drained by them, it keeps pace with inflation, and there's something left for family or aged care. "Spend it down" needs less up front, but it quietly bets on dying roughly on schedule — and leans on the Age Pension if you don't.

The best part of super, and the question everyone asks: if your fund earns the returns that pay you $120k/year, is that taxed? Once you're in retirement (pension) phase from age 60, the tax essentially disappears.

So from 60: the returns generating your income are taxed at 0%, and the money you draw out is tax-free — $120k drawn is $120k in your pocket. There's no "commission" to withdraw it either; the only ongoing cost is your fund's management fee (that's Module 6).

The one limit — the Transfer Balance Cap: you can move up to $2 million (from 1 July 2025, indexed over time) into the tax-free pension account. Anything above stays in "accumulation", where earnings are taxed at 15% — still low, not zero. For most people the cap is well above their balance, so the whole lot is tax-free.

Here's what trips people up: the "$3 million" figures you hear quoted are in today's dollars. But you retire in the future — and by then, the same lifestyle costs more.

At 2.7% inflation — about Australia's 20-year average — a $120,000 lifestyle today costs about $204,000 in 20 years. So the balance you'll actually need is bigger than the headline number. The calculator below shows both: today's purchasing power, and the real dollars you'll need in the year you retire.

You want $120,000/year (today's money), you're 20 years from retiring, your super earns 8.98% (Hostplus Indexed Balanced's since-inception return), and inflation runs 2.7% (Australia's 20-year average):

In today's purchasing power those are ~$2.0M and ~$1.6M — but you won't be retiring in today's dollars. That's the inflation trap: the real target keeps climbing the further off retirement is. (And note: 8.98% is your working-years return — see the caveats.)

Now flip it around. Your employer already pays 12% into super — how much do you need to add on top (salary sacrifice) to reach your never-run-out number?