For the first time ever, the Australian Retirement Standard has provided an annual living costs guide for retirees who rent.
This reflects the high cost of housing in Australia and the increasing expectation that more of us will rent later in life.
Retirement costs significantly more each year if you're renting than if you own your home outright, according to the data.
For renters, a 'modest' retirement is estimated to cost $64,259 per annum for couples and $46,663 per annum for singles.
For homeowners without a mortgage, a modest retirement costs $48,184 for couples and $33,386 for singles.
The annual budgets assume retiree renters are leasing an ordinary one or two-bedroom apartment in a middle to outer ring suburb.
The budgets also take into account the level of government rent assistance available to those receiving the age pension.
The Retirement Standard is Australia's trusted guide for budgeting in retirement.
It's compiled by the Association of Superannuation Funds of Australia (ASFA) and is updated quarterly for inflation.
Introduced in 2004, the Retirement Standard has always published budgets that assumed debt-free home ownership by retirement age.
But after decades of property price growth, which has delayed the average age of first home ownership, this is no longer a given.
Research shows an increasing number of retired Australians are either still paying off a home loan or renting.
Vanguard's How Australia Retires report reveals 8% of retirees still have a home loan.
Nearly one in five retirees lives in a rental property.
In addition, 30% of working Australians expect to still be paying off their mortgage in retirement.
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Living costs if you're renting in retirement
ASFA defines a 'modest' retirement as having a basic standard of living.
This is better than relying on the age pension alone, but it still only allows for the basics of life.
This includes basic private health insurance, a cheaper car, basic internet and mobile phone, infrequent exercise and leisure activities, few restaurant meals, and one domestic holiday per year.
ASFA said it had created a retirement living costs budget for renters because more people are likely to be renting in their post-work years.
Retiree renters have higher housing costs in the form of rent compared to homeowners who pay council rates, insurance, and repair costs.
ASFA CEO Mary Delahunty said:
These new figures demonstrate how important it is that we build more homes in this country so Australians can buy a house or an apartment.
They also illustrate how super can be the difference between hardship and stability later in life, especially for renters, which is why we need to keep it safe for retirement.
How much superannuation do you need if renting in retirement?
The pension alone is nowhere near enough to cover annual living expenses of $64,259 for couples and $46,663 for singles who rent.
The full age pension, including all supplements but excluding rent assistance, is $45,037.20 per year for couples and $29,874 for singles.
ASFA says this highlights the importance of superannuation savings for retirees who rent.
So, ASFA has also provided a guide as to how much superannuation Australians need by age 67 to fund a modest retirement while renting.
Couples need at least $385,000 in superannuation and singles need at least $340,000.
These figures assume retirees receive an average total return of 6% per year on their superannuation savings.
Changes to pension eligibility from 1 July
The latest changes to the pension eligibility criteria come into effect on 1 July.
The changes raise the thresholds for the pension assets and income tests.
You can read about the latest changes here.
