The New Costs Of Retiring Comfortably

New data from the Association of Superannuation Funds of Australia reveals the expenses for a comfortable retirement have surged. A couple around 65 years old now needs $1382 per week, while singles need $982, surpassing current pension payments.

Analysis from AustralianSuper indicates that the average age people seek retirement advice is 57, which is often too late, according to experts.

ASFA’s latest retirement standard for the December quarter hit a record high. The figures show a 3.5% increase over 2023, slightly below the official inflation rate of 4.1%.

Leading the rise in retirement costs is a significant increase in insurance prices, up by 16.2% in 2023. Additionally, food and electricity costs have outpaced general inflation.

ASFA CEO Mary Delahunty notes that increasing the compulsory Super Guarantee payments to 12% by mid-2025 could help more people reach the comfortable retirement standard. However, achieving this currently requires a couple to have a combined super balance of $690,000 and a single person to have $595,000, alongside some age pension.

Leisure spending is a major part of retirement budgets, with activities like travel, sports, dining out, and entertainment. Delahunty emphasises the importance of staying engaged in the community and keeping active.

AustralianSuper’s research highlights the importance of seeking retirement advice early. They suggest actions such as salary sacrificing from age 35, which could significantly boost retirement balances.

AustralianSuper financial planner Fern Havea warns that delaying retirement planning could result in working longer than desired. She stresses the importance of starting retirement planning as early as possible.

Both ASFA and AustralianSuper emphasise the need for people to engage with their superannuation and plan for retirement early on. They suggest actions like checking fund performance, making extra contributions, and using online tools to understand retirement options better.