The latest Association of Superannuation Funds of Australia (ASFA) Retirement Standard has shown cost-of-living challenges currently dominating the domestic economy are still significantly affecting retirees, with costs that account for the majority of their budgets rising quicker than inflation.
The industry body’s analysis indicated that over the 12 months to June 2026, the Consumer Price Index increased by 3.8 per cent, but also a number of everyday living expenses for individuals who are no longer working rose at a more rapid rate in comparison.
To this end, the ASFA Retirement Standard noted electricity jumped by 22.4 per cent after the end of commonwealth and state rebates, maintenance and repair of vehicles went up by 6.5 per cent, medical and hospital services increased by 5.0 per cent, insurance rose by 4.9 per cent, hairdressing and personal grooming services jumped by 4.2 per cent and meals out and takeaway increased by 4 per cent.
All of these elements contributed to a result reflected in the ASFA Retirement Standard that a comfortable retirement for a couple who own their own home now costs $1513 a week, or $78,998 annually, and for a single homeowner it costs $1076 a week or $56,166 a year.
Given these figures, ASFA concluded the age pension only funded around 60 per cent of the income needed to achieve a comfortable retirement as the maximum income stream under the social security measure is currently $905 a week for a couple and $600 for a single.
“The age pension is a social welfare net that guarantees no older Australian has to live in poverty. It was never designed to fund the kind of lifestyle in retirement that most Australians aspire to. Super is the difference between watching every dollar and having a sense of financial security in retirement,” ASFA chief executive Mary Delahunty said.
To this end, Delahunty pointed out there is evidence superannuation is achieving the goal of allowing Australians to achieve a comfortable lifestyle in retirement.
“With super at 12 per cent of wages, the average worker earning $110,000 is finally on track to retire at the comfortable standard,” she explained.
Further, she warned against any change to the current superannuation guarantee settings.
“Any erosion of 12 per cent super would undo the gains our country has made on working Australians retiring with dignity,” she noted.
Darin Tyson-Chan
Editor
Darin is the founder and publisher of Benchmark Media, an independent publishing house whose mastheads include financialobserver, selfmanagedsuper and smstrusteenews. He has been covering the financial services space for over a decade and in this time he has worked for a variety of trade publications. Darin has also written for the Money section published in The Sydney Morning Herald and The Age.
Articles by Darin