I'm planning to retire with $1 million in superannuation. How much passive income can I earn? 

Can I earn enough passive income to support a comfortable lifestyle from $1 million in superannuation?

Retiring with $1 million in superannuation to support a comfortable retirement is a great goal.

And, depending on your lifetime salary and whether you make additional voluntary contributions to your super over time, it's certainly an achievable figure.

As for how much passive income you can earn from that $1 million balance, that will, of course, depend on the yield that you're earning.

Now, for the purposes of this article, we'll assume you have a sizeable amount of additional assets, as well as other liquid savings and investments to cover any unexpected costs. If not, it's generally not advisable to invest all of your superannuation into the stock market.

But if that is the case, it could enable you to invest the full $1 million in quality S&P/ASX 200 Index (ASX: XJO) dividend stocks. With history as our guide, this is a great means to achieve a reliable annual passive income stream.

We'll look at a few of those quality ASX 200 dividend stocks below, as well as calculate how much passive income you might expect to receive from that $1 million in superannuation.

But first…

Beautiful young woman drinking fresh orange juice in kitchen.

Image source: Getty Images

Inflation and trailing yields

The idea behind this $1 million superannuation investment is to earn an annual passive income stream without drawing down on the balance. You'll also want to at least match inflation levels to ensure the real (inflation-adjusted) income you're earning isn't eroded over time.

Now, the S&P/ASX 200 Gross Total Return Index (ASX: XJT), which includes all cash dividends reinvested on the ex-dividend date, has gained 42.2% over the past five years. That works out to an annualised return of about 7.3% per year.

Remember that figure.

Also, remember that the dividend yields you usually see quoted are trailing yields. Future yields may be higher or lower depending on a number of company-specific and macroeconomic factors.

With that said…

How much passive income from a $1 million superannuation investment

We'll look at three ASX 200 dividend stocks to give you some idea of the yield you might receive from that superannuation investment (based on market prices on 10 September).

First, Aussie fuel supplier Ampol Ltd (ASX: ALD) shares trade on a fully-franked trailing dividend yield of 5.7%.

Then we have big four ASX 200 bank stock Westpac Banking Corp (ASX: WBC). Westpac shares trade on a fully-franked 4.4% trailing dividend yield.

And third, ASX 200 telco Telstra Group Ltd (ASX: TLS) shares trade on a 4.3% trailing dividend yield, franked at 90%.

If you were to invest the same amount into each of the above ASX 200 dividend stocks, you could then expect a yield of 4.8%.

So, your $1 million superannuation should see you earning $48,000 a year in passive income, with tax benefits from those franking credits.

Now remember the 7.3% annualised gains posted by the S&P/ASX 200 Gross Total Return Index? That extra 2.5% in annual growth over the passive income yield should be enough to mitigate the eroding effects of inflation over time.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Superannuation

Numerous Australian dollar notes laid out.
Superannuation

The average superannuation balance at age 55 versus 65 in Australia

How much do you have in your superannuation?

Read more »

Hand of a woman carrying a bag of money, representing the concept of saving money or earning dividends.
Superannuation

How much is needed in superannuation to target a $100,000 annual passive income?

Superannuation can be used to unlock massive cash flow.

Read more »

Woman with $50 notes in her hand thinking, symbolising dividends.
Superannuation

How much superannuation do I need to generate $100,000 per year in passive income?

And potential ASX shares you could invest your superannuation in.

Read more »

Woman using her laptop with her feet up.
Superannuation

Is $750,000 in superannuation enough to retire at 60?

I crunch the numbers to see how much difference seven extra years of retirement could make.

Read more »

Stacks of Australian dollar currency banknotes.
Superannuation

Average superannuation balance at age 56 in Australia in FY27. How does yours compare?

And some tips to boost your balance before it's too late.

Read more »

Woman dreaming and sleeping on a cloud up in the sky.
Superannuation

How much passive income can I earn from a $950,000 superannuation balance?

Invest your superannuation and earn money while you sleep.

Read more »

Couple on their laptop in their home kitchen.
Superannuation

How almost any Australian can reach the average superannuation balance of a 60-year-old

These are some ways to reach a great superannuation balance.

Read more »

Couple on their laptop in their home kitchen.
Superannuation

The average superannuation balance at ages 50 and 60. How does yours compare?

Age 50 and 60 are important milestones when it comes to your superannuation.

Read more »