Single pensioners will get an extra $36.80 per fortnight under inflation adjustments to the age pension effective today.
This raises the full pension payment to $1,237.70 per fortnight.
Couples on the full pension will receive an extra $27.80 per partner, per fortnight, or $55.60 combined per fortnight, from today.
This increases the full pension to $933 per partner, per fortnight, or $1,866 combined per fortnight.
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Is the pension enough to fund your retirement?
No, it's not.
Annually, the newly adjusted full age pension totals $32,180.20 for singles and $48,516 for couples.
The ASFA Retirement Standard, which is considered Australia's benchmark retirement budgeting tool, lays out the costs of living today.
AFSA says a comfortable retirement costs $56,166 per year for single homeowners and $78,998 per year for couple homeowners.
A modest retirement costs $36,548 per year for single homeowners and $52,690 per year for couple homeowners.
For renters, a modest lifestyle costs $51,418 per year for singles and $69,376 for couples.
ASFA does not provide a cost estimate for a comfortable retirement for renters.
These figures are in today's dollars, and ASFA adjusts them quarterly to account for inflation.
ASFA lays out exactly what it means by a 'comfortable' retirement and a 'modest' lifestyle here.
What's the gap?
For a comfortable retirement, single homeowners receiving the full age pension need to plug a $23,985.80 hole every year.
Couple homeowners aiming for a comfortable retirement need to find $30,482 per year to cover the gap.
For a modest retirement, single homeowners receiving the full pension need another $4,367.80 to cover their living costs.
Couple homeowners getting the full pension need to find $4,174 per year to fund a modest retirement lifestyle.
Single renters on a full pension face a gap of $19,237.80 per year to fund a modest retirement.
Couple renters on a full age pension need to find $20,860 per year to fund their costs of living.
So, how do you find that extra money?
The most obvious way, of course, is superannuation.
When people retire, they typically transfer their superannuation from the accumulation phase into an account-based pension.
This moves their super into what's known as the retirement phase, where investment earnings are generally tax-free.
Pension payments from your superannuation are also generally tax-free once you're aged 60 or over.
But there's a catch…
If you have a large amount of money in superannuation, you're unlikely to be eligible for the full age pension from Centrelink.
However, as you draw down your super throughout retirement, you may eventually become eligible for the full payment, depending on the value of all your assets combined.
The pension is means tested using an assets test and an income test.
Assessable assets include your superannuation, ASX shares, bonds, investment properties, cash, and home contents.
Under the assets test, single homeowners whose assets are worth less than $333,000 qualify for the full age pension.
Single homeowners whose assets are worth between $333,001 and $745,750 are eligible for a part-payment.
Couple homeowners whose assets are worth less than $499,000 qualify for the full age pension.
Couple homeowners who have between $499,001 and $1,121,000 in assets are eligible for a part-payment.
