Adequate retirement savings misjudged
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The study revealed 42 per cent of Australians believe they need more than $1 million to retire comfortably. However, ASFA estimates a couple requires $730,000 and a single person $630,000 to provide themselves with a comfortable lifestyle when they cease gainful employment.
At the same time, the most recent ASFA Retirement Standard increased by 1.5 per cent over the March quarter for a couple and 2 per cent for a single person, while the consumer price index rose by 1.5 per cent over the same period.
“Inflation is changing how Australians think about their financial futures. When households really feel the pressure of grocery, petrol, energy and other bills [that] keep climbing, people naturally assume that retirement will cost a fortune,” ASFA chief executive Mary Delahunty noted.
“But the reality is that retirement generally costs less than working life. Retirees pay no tax on superannuation pension income after 60, most own their home outright, work-related costs disappear and concessions reduce the price of energy, medicines, transport and council rates.”
ASFA indicated the housing affordability crisis for young people may also be a factor in people’s estimations of how much they will need in retirement. A much larger proportion, 51 per cent, of young people aged between 25 to 34 feel they will need more than $1 million to retire comfortably, with 23 per cent saying they will need more than $2 million.
“House prices have diverged significantly from wages over the last two decades and many people now expect to carry rent or mortgage payments into retirement. It makes sense that they believe they will need much more in super than earlier generations did,” Delahunty said.
For retirees the biggest price increases over the 12 months to the end of March were for electricity, up 25.4 per cent, automotive fuel, up 24.2 per cent, coffee and tea, which rose by 10.7 per cent, and beef prices, which increased by 11.8 per cent.
June 15, 2026
Penny Pryor
smsmagazine.com.au