Cost of a comfortable retirement is climbing slower than inflation
A comfortable retirement is more within reach for younger workers, and the cost of essentials is easing for seniors. Here are the latest figures on how much you need to retire well.
The cost of a comfortable retirement is climbing slower than inflation, new analysis shows.
Fresh modelling from the Association of Superannuation Funds of Australia shows a homeowner couple retiring today requires $73,875 a year to live comfortably, while for a single homeowner it is $52,383.
These expenses climbed 1.6 per cent in the year to March 31, below Consumer Price Index inflation increases of 2.4 per cent.
Yet many retirees are feeling the impact of rising prices for essentials as they worry about global conflicts and a potential hit to their investment streams.
ASFA CEO Mary Delahunty said the costs of grocery items such as fruit, vegetables and meat remained a concern for retirees.
“Australians in retirement are starting to benefit from a slowdown in inflation, but the prices of essentials are still rising,” she said. “It’s a timely reminder that achieving a dignified retirement takes planning.”
ASFA estimates the biggest weekly costs for a homeowner couple retiring comfortably are health ($223.46), food ($256.71) and leisure ($342.25).
Many seniors face fresh pressures as falling Reserve Bank interest rates dent their income from cash, while worsening global conflicts and trade wars spark fears about investments and financial markets.
Economists are forecasting up to four more RBA cash rate cuts by February 2026, following two already this year.
Goldsborough Financial Services director Brenton Miegel said this would impact seniors who had benefited from higher returns from cash deposits helping to offset their rising household costs.
“As we see banks drop savings account interest rates, it adds another level of complexity and pressure on people,” he said.
Mr Miegel said retiree clients were talking about high costs of essentials “all the time”.
“Lots of people talk about the fact that they go to the supermarket and are spending more money but not buying more things,” he said. “Utility prices and insurance feel like they are going up all the time. The cost of living is certainty biting.”
Mr Miegel said seniors also worried about the performance of their investment portfolios amid Donald Trump’s tariff talk and escalating global wars. “There’s quite a bit of discomfort, particularly around global uncertainty,” he said.
Research released recently by Australian Seniors found a majority of older Australians are struggling to pay for essentials, more are making daily sacrifices, and financial pressures are affecting people’s health.
If you’re 30 you’re on track
However, in better news for younger adults, ASFA has calculated that a 30-year-old with $30,000 in super and a median wage of $75,000 is on track to reach a comfortable retirement, thanks to rising compulsory employer superannuation contributions.
It calculates that by age 67 they should have $610,000 in super, which is above the $595,000 nest egg ASFA forecasts they will need.
Couples should fare even better where both have superannuation balances. ASFA says a couple requires $690,000 combined to live comfortably using their super plus age pension top-ups.
“We can now say that the system foundations are cemented for young, working people to have a comfortable retirement,” ASFA’s Ms Delahunty said.
Separate modelling released on Tuesday by the Super Members Council shows July’s rise in the Superannuation Guarantee from 11.5 to 12 per cent will deliver an extra $317 in super to average workers next financial year, and give today’s 30-year-olds an extra $22,000 at retirement.
It notes that, despite Australia’s population ageing quickly over the next four decades, including a trebling of people aged over 85, age pension costs will reduce from 2.3 per cent of GDP to 2 per cent by 2063.
Super Members Council CEO Misha Schubert said Australia’s super system was “the envy of the world”.
“It lifts the retirement savings of everyday Australians, takes pressure off the taxpayer-funded pension … and gives millions of Australians a better life at retirement,” she said.
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Originally published as Cost of a comfortable retirement is climbing slower than inflation
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