The cost of living in retirement has increased by more than $2,000 per annum, according to the latest update from the Association of Superannuation Funds of Australia (ASFA).
ASFA has just updated its Retirement Standard budgeting guide to take into account inflation for the June quarter.
ASFA created Australia's Retirement Standard in 2004, and updates it every quarter to reflect inflation.
The Retirement Standard provides a realistic budget for general living expenses for a comfortable and modest retirement lifestyle. You can find out how ASFA defines comfortable and modest here.
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What does retirement cost?
In today's dollars, a comfortable lifestyle now costs $78,998 per year, up from $75,319 in the June quarter 2025, for couples who own their own homes.
For single homeowners, a comfortable lifestyle now costs $56,166 per year, up from $53,289 in June 2025.
A modest retirement lifestyle now costs $52,690 per year for couple homeowners, up from $49,992 in June 2025.
For single homeowners, a modest retirement now costs $36,548 per year, up from $34,522 in June 2025.
For retired couples who rent their homes, a modest lifestyle now costs $69,375 per year, up from $66,269 in June 2025.
For singles who rent in retirement, their living expenses now total $51,418 per year, up from $49,044 in June 2025.
ASFA says the goods and services that dominate retirees' costs of living are rising faster than the 3.8% annual inflation rate for the June quarter.
ASFA CEO Mary Delahunty said:
Retirees are among the groups hit hardest by the cost-of-living crisis because their budgets are weighted towards the things going up in price the most.
These costs include electricity, up 22.4%, car maintenance and repairs, up 6.5%, medical and hospital services, up 5%, and insurance, up 4.9%.
What about superannuation?
Delahunty said superannuation represented "the difference between watching every dollar and having a sense of financial security in retirement".
ASFA says couples need $730,000 in superannuation and singles need $630,000 by age 67 to fund a comfortable retirement lifestyle.
For a modest lifestyle, couples need $120,000 and singles need $110,000 in superannuation savings.
What about the pension?
The age pension is indexed twice per year, in March and September, to keep pace with inflation.
Following the inflation adjustments this month, single pensioners are now receiving an extra $36.80 per fortnight. This raised the full pension payment to $1,237.70 per fortnight.
Couples on the full pension are now receiving an extra $27.80 per partner, per fortnight, or $55.60 combined per fortnight. This raised the full pension to $933 per partner, per fortnight, or $1,866 combined per fortnight.
The pension is means-tested using an assets test and an income test.
Find out how much you can own and earn while still qualifying for the age pension here.
