The cost of living in retirement

If you plan to keep enjoying your current lifestyle when you retire, it's generally suggested that, if you own your own home, you'll need to save enough to provide you with at least 70% of your current annual income1.

The full Age Pension, if you're eligible, can provide you with $28,514 per year for a single income ($1,096.70 per fortnight - maximum basic rate including supplements). Read more on Services Australia's website.

However, research by the Association of Superannuation Funds of Australia (ASFA) indicates that relying solely on the Age Pension will not be enough for a comfortable retirement.

The below estimates assume you don't pay mortgage or rent

ASFA's Retirement Standard estimates the budget required for both a 'comfortable' retirement and a 'modest' retirement. Both budgets assume that retirees own their own home outright and are relatively healthy. If you don't own your own home, you'll need to factor in the additional expenditure to the estimates below.

If you're thinking about downsizing your family home for retirement, you may be able to contribute money from the sale into your super. Read more about downsizer contributions.

How much do you need to retire?

Most people want a comfortable retirement - whatever that looks like for them.

While this will mean different things to different people, everyone wants to be able to afford a good standard of living, with enough to spend on things like leisure activities, private health insurance and household goods.

Comfortable retirement around age 67

According to the Association of Superannuation Funds of Australia (ASFA), to achieve a comfortable retirement aged around 672, you need:

Single

$51,278.30 per year

Couple

$72,148.19 per year

On a fortnightly basis, a single person needs roughly $1,954.57, while a couple needs around $2,749.80 for a comfortable retirement.

A modest retirement, which allows for only basic activities although is better than relying only on the Age Pension, is estimated at $32,665.66 for singles per year, and $46,994.28 for couples.

Compare different lifestyles in retirement

The below table is based on ASFA research for retirees aged around 67.

It shows the expected lifestyles for a comfortable retirement, modest retirement and retirement relying on the Age Pension alone, per year.

The Age Pension annual amounts are approximate, based on maximum fortnightly rates, including supplements, as determined by Services Australia.

Compare the different lifestyles in retirement
  Comfortable retirement Modest retirement Age Pension

Single 

$51,278.30$32,665.66$28,514
Couple$72,148.19$46,994.28$42,988



Home

  • Replace kitchen and bathroom over 20 years
  • Can run air conditioning
  • Fast internet connection, big data allowance and large talk and text allowance
  • No budget for home improvements. Can do repairs, but can't replace kitchen or bathroom
  • Need to watch utility costs
  • Limited talk and text, modest internet data allowance
  • No budget to fix home problems like leaky roof
  • Less heating in winter
  • Very basic phone and internet package

Health care and food

  • Top level private health insurance
  • Restaurant dining, good range and quality of food
  • Basic private health insurance, limited gap payments
  • Take out and occasional cheap restaurants
  • No private health insurance
  • Only club special meals or inexpensive takeaway
  

Holidays and leisure  
  • Domestic and occasional overseas holidays
  • Take part in a range of regular leisure activities
  • One holiday in Australia or a few short breaks
  • One leisure activity infrequently, some trips to the cinema or similar
  • Even shorter breaks or day trips in your own city
  • Only taking part in no cost or very low cost leisure activities. Rare trips to the cinema

Car
  • Owning a reasonable car
  • Owning an older less reliable car
  • No car or, if you have a car it will be a struggle to afford repairs

As you get older, the budgets change

It's likely you'll need less money later in retirement.

This may be because you're no longer raising a family, paying tax on your income, making super contributions or paying off a home. Your priorities and requirements can also change as you age as you may spend more on assistance in or outside the home and medical expenses.

For people 85 and above, ASFA estimates the below amounts are required for a comfortable retirement3:

Single

$48,074.77 per year

Couple

$66,455.12 per year

On a fortnightly basis, a single person needs roughly $1,814.90 while a couple needs around $2,513.30 for a comfortable retirement.

The annual cost for a modest standard of living at 85 years old is $30,417.12 for singles and $43,523.83 for couples.

Are you on track for a comfortable retirement?

We know figuring out how to achieve a comfortable retirement can be overwhelming. Here are some possible next steps and resources to help you maximise your lifestyle in retirement.

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Boost your retirement savings

Find out more

You can take action to grow your retirement savings in several ways, including making extra contributions, combining your super to reduce the fees you pay, and salary sacrificing.

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Retirement planning calculator

Use calculator

Try our retirement planning calculator for an estimate of how much you'll have when you retire, and how long it will last.

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Register for a seminar or webinar

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Join one of our webinars or seminars to get more clarity on super, planning for retirement and some possible next steps.

1 Mercer CFA Institute Global Pension Index 2021, Pension reform in challenging times, accessed January 2024.
2 The Association of Superannuation Funds of Australia (ASFA), Retirement Standard, aged around 67, September quarter 2023.
3 The Association of Superannuation Funds of Australia (ASFA), Retirement Standard, aged over 85, September quarter 2023.

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Page last updated 21 March 2024

Thank you for printing this page. Remember to come back to gesb.wa.gov.au for the latest information as our content is updated regularly. This information is correct as at 27 April 2024.