Comfortable retirement now costs more

The cost of a comfortable retirement has reached a record high.

According to the latest Retirement Standard Report from the Association of Superannuation Funds of Australia, the super balance needed at 67 for homeowners to fund a comfortable retirement in Australia has jumped by $35,000 for singles and $40,000 for couples.

The updated comfortable retirement lump sums for homeowners aged 67 are now $630,000 for singles (up from $595,000), and $730,000 for couples (up from $690,000). 

ASFA said this is the first time these lump sum figures have increased in three years. 

Mary Delahunty, ASFA CEO, said the rise in lump sum benchmarks reflects greater pressures from living expenses on retirees’ super savings.

“Retirees’ living costs have risen, and support from the age pension has not kept pace with this rise. This means retirees need higher super savings to maintain a comfortable lifestyle,” Delahunty said.

ASFA stated that super balances are also on track to increase. A 30-year-old worker with $30,000 in super today and earning $80,000 throughout their career adjusted for inflation is on track to retire with $645,000.   

“Australia’s super system is built on a bargain: you pay concessional tax rates if you save part of your income for retirement. That bargain is working exactly as it is supposed to, incentivising Australians to save for their own retirements and reducing reliance on government welfare payments,” Delahunty said.

According to the latest report, the lump sums’ revision is because of two crucial factors: the fact that the age pension has not kept pace with retirees’ cost of living and the recently announced increase in deeming rates.

“The age pension has not kept pace with the actual cost increases retirees face, particularly for essential goods and services,” Delahunty said.  

“Costs in the categories that retirees tend to spend most on have risen faster than general consumer price inflation. That means even though the age pension is indexed, a greater burden is placed on retirees’ personal super savings.”

Last week, the government announced significant changes to deeming rates (the assumed rates of return applied to financial assets when assessing age pension eligibility).

From 20 March 2026, the lower deeming rate will rise to 1.25 per cent (from 0.75 per cent) for financial assets under $64,200 for singles and $106,200 for couples. The upper rate will rise from 2.75 per cent to 3.25 per cent for assets over the same thresholds.

These rates were last adjusted in September 2025, which ended a five-year pandemic-era freeze where rates sat at 0.25 per cent and 2.25 per cent, respectively. 

“When deeming rates rise, a person’s assessed income can increase even if their actual investment returns have not, which can reduce their age pension. This shifts more of a retiree’s budget towards reliance on super rather than Centrelink,” Delahunty said. 

The lump sums required for a modest retirement have also increased to $110,000 for singles and $120,000 for couples, up from the previous $100,000 for both groups. 

This quarter’s ASFA Retirement Standard budgets show that homeowners aged 65 and over now need $77,375 annually for a comfortable retirement as a couple, and $54,840 for a single.  

Retirees continue to face higher inflation than the general population because they spend more on essentials that have risen fastest.

Keeli Cambourne

February 25 2026

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