Working out how much super you can spend each year without running into trouble can be difficult, but new research may provide an answer.

Calculations by a crack team at the Actuaries Institute found the average retiree should be spending an amount equivalent to the first digit of their age each year to avoid over- and under-spending.

In other words, someone aged 65 should be drawing down 6 per cent of their superannuation each year, while someone aged 77 can comfortably spend 7 per cent.

Retirees with larger super balances between $250,000 and $500,000 can add an extra 2 per cent again, meaning someone aged 65 with a balance of $400,000 can afford to spend 8 per cent of their super that year.

These calculations are for single retirees who own their own home. For Australians retiring in couples the rule needs a few slight amendments, report co-author John De Ravin told The New Daily.

While the Actuaries Institute team are yet to tackle the specific numbers for coupled retirees, Mr De Ravin said a “sensible approach” would be to apply the rule for singles to the youngest member of a couple.

“The balance range for singles to add 2 per cent would also need to be adapted to reflect the higher asset testing range for couples,” Mr De Ravin added.

“That’s more likely to be $350,000 to $850,000 for couples.”

These rules only apply when the sum being drawn down meets the statutory minimum drawdown rules (which force retirees to take a set portion of their retirement balance out of super each year).

That means Mr De Ravin’s rule works only until the age of 85, when the statutory minimum changes to 9 per cent rather than the 8 per cent indicated by a retiree’s age.

Retirees living off less

Just under 2 million Australians use (or have used) a financial adviser, accounting for only 9.7 per cent of the country, leaving a majority of people to manage their retirement on their own.

“For those people, it’s really difficult to work out if they have enough money to retire, and how much they can afford to spend from their account based pension,” he said.

“Those decisions are really hard, they’re actually sort of challenging even for people who are highly financially literate and astute, and not everyone has those financial literacy skills.”

As a result, a large portion of retirees are choosing to draw down the bare minimum permitted under the law.

“But the statutory minimum was never intended to be a guide to how much people should spend,” Mr De Ravin said.

“It was always intended as a minimum just to force people to take some amount of money out of superannuation.”

Retirees employing this strategy can afford a better lifestyle but miss out because they are afraid they could outlive their money.

Mr De Ravin said this rule of thumb should help those retirees reassess their yearly spending and help them gauge whether they can splash out on a few more luxuries than they otherwise might.

By spending more, then down the track you will have less savings,” he said.

“But we think is that the additional expenditure in those first 18 years of retirement more than outweighs the fact you’ll have slightly fewer assets by age 85.”