Business News

Cost of comfortable retirement continues to rise

The cost of a comfortable retirement for couples increased by 0.3 per cent to $57,817 a year in the March quarter.

That figure would require a joint superannuation balance of around $510,000, according to the Association of Superannuation Funds of Australia (ASFA).

The ASFA Retirement Standard for the March quarter showed costs for single retirees also increased.

Single pensioners seeking a comfortable retirement will now need to spend $42,254 a year, an increase of 0.2 per cent on the previous quarter.

This will require a super balance of around $430,000.

On a yearly basis, the ASFA Retirement Standard showed the cost of retirement increased by 2.7 per cent at the comfortable level.

Earlier this month, the government released the National Commission of Audit’s report, which recommended a series of sweeping reforms to the age pension.

Among the measures, the commission proposed increasing the age pension age to 70 by around 2053, while also including the value of the primary residence above $750,000 for a couple or $500,000 for singles in a new means test from 2027/28.

With the government due to release its budget on Tuesday, it was important it considered the impact policy changes might have on the cost of living for Australia’s retirees, ASFA chief executive Pauline Vamos said.

“Retirees often have less flexibility in their budgets, which means policy changes that increase the cost of non-discretionary items, such as electricity or fuel, may mean they have to cut back in other areas, and lower their standard of living,” Vamos said.

“Rising costs also highlight the importance of superannuation to ensure people have enough money to live the lifestyle they expect in retirement for all their post-work years.”

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