Cost-of-living increases are being felt across the economy. As the price of everyday essentials rises, the amount Australians need to fund a comfortable retirement is increasing.
According to the latest ASFA Retirement Standard, homeowners aged 67 now need approximately:
- $630,000 in superannuation for singles
- $730,000 for couples
to fund a comfortable retirement.
These figures represent increases from $595,000 for singles and $690,000 for couples a few years ago.
While these numbers can seem confronting at first glance, they are best viewed as guidelines rather than strict targets. Understanding what sits behind the change can help put the figures into context and assist Australians in making more informed decisions about their financial future.
Why have the recommended super balances increased?
Two key factors are driving the rise in retirement benchmarks: increasing living costs and changes to deeming rates used in the Age Pension assessment.
Rising living costs
Although the Age Pension is indexed, it has not always kept pace with the real cost increases retirees experience. Retirees typically spend a larger share of their budget on essential items, and many of those essentials have seen significant price rises.
Over the past 12 months:
- Electricity increased by 21.5%
- Coffee and tea rose 15.3%
- Beef increased 10.8%
- Domestic travel rose 9.6%
- Medical and hospital services increased 4.3%
For homeowners aged 65 and over, the estimated annual budget required for a comfortable retirement is now:
- $54,840 per year for singles
- $77,375 per year for couples
This represents a 3.8% increase over the past year.
When everyday expenses rise faster than pension increases, retirees may need to rely more on their own superannuation savings.
Changes to deeming rates
The second factor influencing the increase is the change to Centrelink deeming rates. Deeming rates are used to estimate the income you receive from financial assets when determining eligibility for the Age Pension. From 20 March 2026, the rates will increase to:
- 1.25% for the lower deeming rate
- 3.25% for the upper deeming rate
Higher deeming rates can increase the income Centrelink assumes you earn from your assets. Even if your investments do not actually generate higher returns, your assessed income may rise, which could reduce Age Pension entitlements.
In practical terms, this may mean some retirees need to rely more on their own savings to support their lifestyle.
There is some positive news, however
Despite the higher benchmark figures, recent superannuation fund performance has been encouraging. Average returns in recent years have been strong:
- 9.9% in 2023
- 11.4% in 2024
- 9.3% in 2025
This represents almost 35% cumulative growth over three years, well ahead of inflation.
In addition, the Superannuation Guarantee has now increased to 12%, meaning Australians are contributing more of their income toward retirement than in previous years. These developments highlight that while economic conditions evolve, the Australian superannuation system continues to support long-term retirement savings.
What does this mean for singles and couples planning retirement?
The ASFA figures provide useful guidance, but they should not be viewed as a one-size-fits-all number. Every retirement plan is different. The amount required to maintain a comfortable lifestyle will depend on several factors, including:
- Whether you own your home
- Your lifestyle expectations
- Travel plans in retirement
- Health considerations
- Your investment strategy
- Access to a full or part Age Pension
- The tax structure of your retirement income
For some individuals, a comfortable retirement may require less than the benchmark, while others may require more, depending on their lifestyle goals.
The key is having a well-structured financial strategy that reflects your personal circumstances. At Australian Financial Planning Group, retirement planning focuses on building a strategy that supports your lifestyle both now and in the future.
Financial planning is not simply about reaching a particular super balance. It is about ensuring your wealth is structured effectively and can generate sustainable income throughout retirement. A financial planner will review your existing superannuation balance, contribution levels, investment structure and retirement timeframe. This helps determine whether you are on track and identify opportunities to improve or adapt your strategy.
Modelling future scenarios
Our financial advisors will work with you on scenario modelling. This allows you to explore these possibilities before making important financial decisions.
- What happens if you retire earlier than expected?
- How would downsizing your home affect your financial position?
- What impact might changes to Age Pension rules have?
Strategies such as salary sacrifice, personal deductible contributions or spouse contributions may help accelerate retirement savings depending on your circumstances.
With the Superannuation Guarantee now at 12%, many Australians are already contributing more to their retirement, but additional strategies can make a significant difference to their long-term outcomes.
We can help
AFPG has the expertise to guide you in wealth accumulation and protection. We’ve helped hundreds of Australians, singles, couples and families make informed decisions that enable them to live a lifestyle of their choosing.
Contact us today for experienced, compassionate, and professional financial advice.