Knowing how much income you'll need in retirement is one of the most important — and most underestimated — parts of the planning process. It's easy to throw out a number, but building a realistic picture takes a bit more thought.

Your retirement spending won't look exactly like your working-life spending. Some costs will fall away. Others — like healthcare, travel, and leisure — may increase, at least in the early years. And costs tend to shift again as you move through different stages of retirement.

We use the ASFA Retirement Standard as a useful benchmark for Australian retirees, but your personal income target needs to reflect your lifestyle — not an average.

Income needs to cover things like:

• Day-to-day living expenses (groceries, utilities, transport)

• Housing costs — whether renting, paying a mortgage, or in a retirement village

• Healthcare, insurance, and any ongoing medications

• Travel, hobbies, and the activities that make retirement enjoyable

• Occasional larger expenses — home repairs, a new car, helping family

Getting this number right — not too conservative, not unrealistic — is what allows us to build a retirement plan you can truly rely on.