What retirement actually costs and how to work out your number

Retirement costs money every year. When you stop earning, you carry on spending and something has to cover the difference. Australia works out that yearly cost four times a year and publishes it. For the March 2026 quarter a single home owner spends $55,923 a year living comfortably, and $36,434 living modestly. A couple with a home spends $78,566 a year comfortably, and $55,473 modestly. I went looking for the kina version of that table and every release I found came out of Canberra.

I looked inside the comfortable budget. Housing takes $155.71 a week and health services take $122.67. Then I looked inside the modest one. Housing costs $132.44 there, so it barely moves, and health costs $60.55, so it halves. The gap between a comfortable retirement and a modest one is mostly health cover.

I went looking because I spent my Stella years paying everybody except a superannuation fund, and I wanted the size of the thing I am walking towards in kina.

The sum I promised yesterday turns a yearly cost into a single target. William Bengen worked it out in 1994 when he created the 4% Rule. He ran thirty-year retirements against United States market history, finding that a pile of savings lasted when its owner drew four per cent of it in the first year and took that same amount again each year after, lifted for inflation. Four per cent is one twenty-fifth, so the pile is the yearly cost, twenty-five times over.

Here it is in kina, with round numbers I chose for the sums rather than for anybody's real life. A retired couple spending K1,200 a fortnight spends K31,200 a year, and twenty-five times K31,200 is K780,000. A couple spending K600 a fortnight spends K15,600 a year, and their retirement target is K390,000. Halving the fortnight halves the pile.

The sum runs backwards too, and that is the version that told me something. Four per cent of a balance, divided by twenty-six, gives the fortnight it pays. Nasfund reported in March that women reach retirement with an average balance of about K7,000. Four per cent of K7,000 is K280 a year, and that is about K11 a fortnight.

Partnerships for Social Protection reports that women reach retirement in the Pacific with insecure property rights, less access to services than men and more years to cover.

Some critics believe Bengen’s sum to be unrealistically high. Scott Pape's answer is the one I ran second, and it comes out far smaller for good reason. Australia pays its retirees an Age Pension, about $22,721.40 a year for a single person, so private savings only cover the gap above it, and Pape puts that gap at a medium at $301,000 single and $402,000 as a couple. Remarkably different to Bengen’s 4% Rule if you do the sums.

Devpolicy Blog reported in April 2026 that three per cent of people in Papua New Guinea hold a contributory pension, the lowest in the region. Here the pile does the whole job, and the family does the rest.

Australia prices its annual cost of retirement every quarter. Until somebody prices ours in kina, Bengen’s multiplication works and the number I feed it is a guess.

One thing I am still chasing. Papua New Guinea runs retirement arrangements that stay off the public web: employer schemes, church and mission funds, provincial arrangements and the ones that pay a widow rather than a worker.

If one of them is yours, tell me what it pays and who qualifies. I will source it and publish what holds up, and you decide whether your name goes with it.

Best

Amanda

P.S. What’s your view on today’s newsletter? Did I miss something out that you’d like to share? Write to me, [email protected]. I may not get back to you, but I will try to read what you send in.

Wild Money is general information only, drawn from my own experience and research. It isn't financial advice, and nothing in it is a recommendation to buy, sell, hold or manage money in any particular way. What worked for me won't necessarily suit you. Please seek advice from a licensed financial adviser before making decisions about your own money.