If you have been quietly adding up what retirement might cost, brace yourself for an update: the figure just moved again. New numbers released this week show a couple who own their home now need $78,998 a year, or $1,513 a week, to live comfortably in retirement. A single homeowner needs $56,166 a year, or $1,076 a week.
The figures come from the Association of Superannuation Funds of Australia, the peak body for the super industry, which updates its retirement standard every quarter. For homeowners aged 65 to 84, the comfortable budget rose 0.5% for couples and 0.4% for singles over the June quarter. Those chasing a more modest retirement will need $52,690 a year as a couple or $36,548 as a single, both up slightly on the previous quarter.
Retirees aged 85 and over need a little less, with a comfortable lifestyle costing $74,484 a year for couples and $53,964 for singles, reflecting lighter spending in later years. Those who rent privately face steeper numbers again, with a modest budget for a couple now sitting at $69,376 a year and $51,418 for a single.
ASFA chief executive Mary Delahunty said the rises are not simply a flow-on from general inflation, which sits at 3.8%. The problem, she said, is that the everyday costs eating into retiree budgets are climbing far faster than that.
“Retirees are among the groups hit hardest by the cost of living crisis because their budgets are weighted towards the things going up in price the most,” Delahunty said.
Electricity is the biggest culprit, up 22.4% once federal and state rebates ran out. Car costs have climbed 6.5%, medical services 5%, insurance almost 5% and meals out 4%. All of them sit in the categories retirees rely on most heavily, from running the family car to keeping up private health cover.
A comfortable retirement, under ASFA’s definition, means being able to hold quality private health insurance, eat out most weeks and take an annual holiday, whether that’s a domestic trip each year or an overseas one every few years. A modest retirement scales that back to basic hospital cover, holidays within Australia and only occasional meals out.
Relying on the age pension alone tells a different story again, with far less room to move.
“Most of these things drop out of your budget entirely,” Delahunty said.
For anyone doing the sums on their own super balance, the message from ASFA is straightforward: check where you sit against the latest figures, because the goalposts for a comfortable retirement have shifted once more, and they are unlikely to sit still for long.
