Australians wanting to retire comfortably without slowing down in old age would need more than $1million in superannuation and savings to ride out a cost of living crisis, new data shows.
The average single retiree, aged 65 to 84, needs $51,805 a year to live comfortably and take an Australian holiday every year.
The Association of Superannuation Funds of Australia (ASFA) says older couples would need $73,077 a year between them for a similar lifestyle provided they owned their own home without a mortgage.
That means a couple would need more than $1.4million, and just over $1million for a single Australian, to sustain a lavish, two-decade stint in retirement, without slowing down.
But ASFA’s Retirement Standard recommends $690,000 in super and savings for couples and $595,000 for singles, based on one overseas holiday every seven years and getting the age pension at 67.
They argue Australians in retirement are more likely to spend more on overseas travel in their 60s than they would in their late seventies and eighties.
ASFA’s cost of a comfortable lifestyle rose by 1.3 per cent last year – or half the pace of the consumer price index increase of 2.4 per cent for 2024.
The data also found retirees were better off in the December quarter with a near 10 per cent fall in electricity bills, due to the government’s taxpayer-funded $300 electricity rebates.
The average single Aussie aged between 65-84 needs $51,805 a year to live comfortably in retirement, while couples need a combined $73,077 a year, according to the research
But domestic holiday travel and accommodation, and insurance for cars and home and contents became more expensive.
ASFA chief executive Mary Delahunty explained high inflation was weighing heavily on retirees but the latest figures proved there was a ‘substantial easing’ in costs and living prices.
‘The good news for retirees from the latest Retirement Standard is there has been a substantial easing in price increases for the goods and services they purchase,’ she said.
‘However, the last couple of years of high inflation are still weighing on their ability to fund a comfortable retirement.’
She added Australians would benefit from paying more than the minimum into their superannuation.
‘The most recent Retirement Standard budgets reinforce the fact that Australians need both compulsory superannuation and voluntary contributions which are preserved until retirement to have the sort of retirement they need and deserve,’ she said.
It comes after the announcement of the United States’ new tariffs on Australian steel and aluminium had hurt superannuation investment funds with exposure to those products.
Even before the tariffs were confirmed, the threat alone had seen super funds drop for only the second time this financial year.
Balanced super funds fell by 0.8 per cent in value in February, despite the Reserve Bank of Australia’s interest rate cut last month.
SuperRatings executive director Kirby Rappell warned the RBA had failed to stem concerns about President Trump sparking a global trade war, prompting the drop.
‘It was clear that signs of discomfort were emerging as markets digested the looming risks of tariffs and the effects that may result in the global economy,’ he said.
‘Despite the Reserve Bank of Australia lowering interest rates in February, both Australian and international share markets declined over the month as the President’s agenda came into focus.
‘The impact of tariffs on China and potential flow on effects to the economy influenced Australian share expectations, offsetting any potential benefit from the reduction in interest rates.’
