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’s 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.

ASFA Retirement Standard for people aged between 65 and 84
Living standard Single annual cost Couple annual cost

Modest

$27,913

$40,194

Comfortable

$43,787

$61,786

On a weekly basis, a single person needs around $838.82 while a couple needs around $1,183.65 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.

ASFA Retirement Standard for people aged 85 and older
Living standard Single annual cost Couple annual cost

Modest

$26,450

$37,767

Comfortable

$41,613

$57,696

On a weekly basis, a single person needs around $797.18 while a couple needs around $1,105.28 for a comfortable retirement.

ASFA Retirement Standard

What income do you need in retirement?

ASFA has produced the below table1,3 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
$43,787 a year
Modest4
$27,913 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

Check how your retirement savings are tracking

By using the information above as a guide, you can find out whether your current savings will be enough, or whether you need to take action to grow your retirement savings.

Try our Retirement planning calculator for an estimate of how much you'll have when you retire, and how long it will last. You can adjust a range of variables, such as extra contributions, to see what the difference will be by the time you retire.

Try the calculator

1 The Association of Superannuation Funds of Australia (ASFA), Retirement Standard, aged around 65, September quarter 2019.
2 The Association of Superannuation Funds of Australia (ASFA), Retirement Standard, aged over 85, September quarter 2019.
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.

Need help

Page last updated 13 November 2019