THE EYE-WATERING AMOUNT YOU NOW NEED IN SUPER AS THE COST OF A COMFORTABLE RETIREMENT SURGES AGAIN

Retirement just got a whole lot more expensive, with new figures revealing Australians now need up to $730,000 in superannuation to enjoy a 'comfortable' lifestyle - the biggest cost blowout in years.

The super balances required at age 67 for homeowners to fund a comfortable retirement have hit a record high, according to the Association of Superannuation Funds of Australia's latest quarterly Retirement Standard.

The updated lump sums now sit at $630,000 for singles (up from $595,000) and $730,000 for couples (up from $690,000), assuming retirees own their home outright and maintain an active lifestyle with travel and discretionary spending. 

ASFA chief executive Mary Delahunty said it was the first increase in the benchmark in three years, blaming the jump on the age pension failing to keep pace with retirees' rising living costs and the recently announced hike in deeming rates.

'Retirees' living costs have risen, and support from the age pension has not kept pace with the actual cost increases they face, particularly for essential goods and services,' she said.

'Costs in the categories retirees tend to spend most on have risen faster than general consumer price inflation. 

'That means even though the pension is indexed, a greater burden is placed on retirees' personal super savings. Retirees now need higher balances to maintain a comfortable lifestyle.'

While CPI rose 3.8 per cent in the 12 months to December 2025, retirees were hit far harder. The biggest price surge came from electricity, up 21.5 per cent as energy bill relief subsidies expired. 

Also climbing sharply were coffee and tea (15.3 per cent), beef (10.8 per cent), domestic travel (9.6 per cent), property rates (6.2 per cent) and medical and hospital services (4.3 per cent). 

Private rental costs, which hit retirees without a home of their own, rose 3.9 per cent, slightly above general inflation.

The squeeze is set to tighten even further after Social Services Minister Tanya Plibersek last week flagged significant changes to deeming rates, the assumed rates of return used to assess age pension eligibility.

From March 20, 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 climb from 2.75 per cent to 3.25 per cent for assets above those thresholds.

Financial adviser Nick Bruining said the change would result in a 'double whack' for those on the age pension. 

'A single age pensioner this time last year could have about $308,000 in financial assets without losing any pension,' he wrote in a column for the West Australian. 

'From March, even with the expected pension increase, that figure drops to about $215,000.'

Ms Delahunty said the change would shift more of a retiree's budget towards reliance on super rather than Centrelink.

Despite the cost pressures, long-term workers are still on track to retire with sizeable savings thanks to strong fund performance. 

A 30‑year‑old with $30,000 in super and earning $80,000 throughout their career is on track to retire with $645,000, buoyed by 'exceptional returns' in recent years.

'The average balanced fund returned 9.9 per cent in 2023, 11.4 per cent in 2024 and 9.3 per cent in 2025,' Ms Delahunty said. 

'That's cumulative growth of nearly 35 per cent over three years, well ahead of inflation. We also have the Superannuation Guarantee steadily rising since 2020, now sitting at 12 per cent.'

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2026-02-25T03:10:28Z