A new study reveals that half of Australians feel financially insecure about retirement, highlighting a “wake-up call” for workers as the cost of living and retirement expenses continue to rise. With millions set to retire over the next decade, the financial challenges are becoming increasingly pressing.
Rising Retirement Costs in Australia
Recent data from the Association of Superannuation Funds of Australia (ASFA) shows that the cost of a comfortable retirement has risen sharply. Retirees now need over $13,000 more per year than five years ago to maintain a standard lifestyle.
- Couples aged 65: $75,319 per year
- Singles aged 65: $53,289 per year
The increase is primarily driven by rising costs in:
- Private health insurance
- Electricity and gas
- Fresh food and groceries
These figures underscore the growing financial pressure facing retirees and emphasize the need for early retirement planning.
Retirement Confidence Across Australians
The AMP Retirement Confidence Pulse found that only 50/100 Australians feel financially secure about life after work. Confidence levels vary across different groups:
- Men vs Women: About 60% of men feel secure compared to only 40% of women.
- Middle-income earners: Half of Australians earning $45,000–$135,000 reported feeling insecure.
- High-income earners: Around 75% of those earning $190,000–$250,000 feel confident.
- Other vulnerable groups: Single parents, job seekers, and the “sandwich generation” managing both children and aging parents feel the most financial pressure.
AMP CEO Alexis George warns that as Australians over 65 are projected to make up nearly a quarter of the population in four decades, financial insecurity among retirees must be a priority for policymakers and the superannuation industry.
How Much Superannuation Is Needed?
A key factor in retirement planning is superannuation balances. ASFA recommends:
- Couples: $690,000
- Singles: $595,000
These estimates assume retirees own their home, draw down all capital, and receive a partial Age Pension.
Super Consumers Australia provides alternative targets for maintaining living standards:
- Couples: $420,000 in superannuation
- Singles: $310,000 in superannuation
With these balances, combined with the Age Pension, homeowners could generate an annual retirement income of $43,000 (singles) to $62,000 (couples) until age 90.
Steps to Boost Retirement Readiness
Australians are encouraged to:
- Consult their super fund or financial adviser for personalised guidance.
- Use online tools and calculators offered by super funds to track progress.
- Explore government resources like MoneySmart for budgeting, retirement planning, and expense forecasting.
FAQs
Q1: How much extra do retirees need annually compared to five years ago?
A: Over $13,000 per year to maintain a comfortable lifestyle.
Q2: How much do couples and singles need per year for a comfortable retirement?
A: Couples: $75,319 | Singles: $53,289
Q3: What superannuation balance is recommended for retirees?
A: Couples: $690,000 | Singles: $595,000
Q4: Who feels the least confident about retirement?
A: Women, single parents, job seekers, and those managing both children and elderly parents.
Q5: Where can Australians find resources for retirement planning?
A: Official tools and advice are available via MoneySmart and individual superannuation providers.
Conclusion
The rising cost of living and increasing retirement expenses serve as a wake-up call for all Australians. With an extra $13,000 per year needed for a comfortable retirement, early planning, superannuation growth, and informed financial decisions have never been more crucial. By understanding retirement needs and using available resources, Australians can secure a financially stable and enjoyable retirement.