Retirement is becoming more expensive in Australia, and many workers are worried about how they’ll afford it. A new report shows retirees now need an extra $13,000 a year compared to 2018 to live comfortably. Rising costs for health insurance, energy, and food are the main drivers, leaving half of Australians anxious about whether their savings will be enough.
How Much Do Retirees Need in 2025?
Recent figures reveal sharp increases in annual living costs:
- Couples aged 65+ now need $75,319 per year.
- Single retirees aged 65+ need $53,289 per year.
These numbers highlight why planning for retirement early is more important than ever.
Why Are Retirement Costs Rising So Fast?
The main reasons behind the cost surge include:
- Health insurance premiums climbing steadily.
- Electricity and gas bills becoming more expensive.
- Supermarket prices rising sharply, especially for essentials.
With these pressures, retirees are forced to spend more just to maintain the same lifestyle they enjoyed a few years ago.
Retirement Confidence Is Falling
A study by AMP found:
- 6 in 10 men feel confident about retirement.
- Only 4 in 10 women feel financially secure.
- Middle-income earners ($45,000–$135,000) are split—half feel worried about the future.
- High-income earners ($190,000–$250,000) are more confident, with 3 in 4 expecting financial security.
- Single parents and people juggling kids and elderly parents report the lowest confidence levels.
How Much Super Do You Really Need?
Different organisations offer different targets:
- ASFA suggests:
- Couples: $690,000 in super.
- Singles: $595,000 in super.
- Super Consumers Australia argues you can retire with less:
- Couples: $420,000.
- Singles: $310,000.
Both estimates assume you also receive some Age Pension.
Steps to Improve Your Retirement Readiness
Here are practical ways Australians can prepare better:
- Check your super balance regularly and track your growth.
- Use retirement calculators on your super fund’s website.
- Seek financial advice tailored to your income and goals.
- Explore tools like the government’s MoneySmart for budgeting and retirement planning.
FAQs About Retirement Planning in Australia
Q1: Why do retirees need $13,000 more per year now?
Because of rising health, energy, and food costs.
Q2: How much super should I aim for?
Depending on the source, couples may need between $420,000–$690,000, and singles $310,000–$595,000.
Q3: Does owning a home reduce retirement costs?
Yes, housing costs are much lower for homeowners compared to renters.
Q4: Who is most worried about retirement?
Women, single parents, and middle-income earners show the highest levels of concern.
Q5: Where can I get help planning?
Your super fund, financial advisers, and the government’s MoneySmart website are great resources.
Conclusion
Retirement in Australia is getting costlier, and many workers are unprepared. With expenses rising by over $13,000 annually, it’s critical to start planning early, track your savings, and seek expert advice. Taking action now can help secure the comfortable retirement you deserve.