The cost of living in retirement

If you plan to keep enjoying your current lifestyle when you retire, our experience tells us that you’ll need to save enough to provide you with at least 70% of your current annual income.

We’re here to help you understand your super and learn how to grow your retirement savings to help you afford the kind of retirement you’d like to have. Whether you’re single or part of a couple, you might be interested in some of the research around the amount of retirement savings you might need to enjoy different standards of living.

The cost of a moderate or comfortable retirement

The Association of Superannuation Funds of Australia (ASFA) reports regularly on the annual cost for singles and couples to achieve either:

• A ‘modest’ retirement - which is better than relying on the Commonwealth Government Age Pension alone, but only allows for fairly basic activities
• A ‘comfortable’ retirement - which represents a good standard of living with enough to spend on a range of leisure activities and household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment and some travel

Based on ASFA research¹, here are the estimated budgets for various households and living standards for people aged around 65.

On a weekly basis, a single person needs around $850.81 while a couple needs around $1,203.60 for a comfortable retirement.

As you get older, the budgets change.

Here are the estimated budgets for various households and living standards for people aged around 85².

On a weekly basis, a single person needs around $813.61 while a couple needs around $1,128.94 for a comfortable retirement.

Learn more about the ASFA Retirement Standard

What income do you need in retirement?

ASFA has produced the below table^1,3 for retirees aged around 65.

The table shows the expected lifestyles for a comfortable retirement, modest retirement and retirement relying on the Age Pension alone.

		Comfortable4 $44,412 a year	Modest4 $28,254 a year	Age Pension5 $21,222 a year
Home		Replace kitchen and bathroom over 20 years	No budget for home improvements. Can do repairs, but can't replace kitchen or bathroom	No budget to fix home problems like leaky roof
Haircuts		Better quality and larger number of household items and appliances and higher cost hairdressing	Limited number of household items and appliances and budget haircuts	Less frequent hair cuts or getting a friend to cut your hair
Heating/cooling		Can run air conditioning	Need to watch utility costs	Less heating in winter
Food		Restaurant dining, good range & quality of food	Take out and occasional cheap restaurants	Only club special meals or inexpensive takeaway
Equipment		Fast internet connection, big data allowance and large talk and text allowance	Limited talk and text, modest internet data allowance	Very basic phone and internet package
Clothing		Good clothes	Reasonable clothes	Basic clothes
Holidays		Domestic and occasional overseas holidays	One holiday in Australia or a few short breaks	Even shorter breaks or day trips in your own city
Health care		Top level private health insurance	Basic private health insurance, limited gap payments	No private health insurance
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
Leisure		Take part in a range of regular leisure activities	One leisure activity infrequently, some trips to the cinema or the like	Only taking part in no cost or very low cost leisure activities. Rare trips to the cinema

1 The Association of Superannuation Funds of Australia (ASFA), Retirement Standard, aged around 65, March quarter 2021.
2 The Association of Superannuation Funds of Australia (ASFA), Retirement Standard, aged over 85, March quarter 2021.
3 Source: Super Guru website.
4 Both budgets assume that retirees own their own home outright and are relatively healthy.
5 Base rate before payment of supplements.