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How much your retirement will cost is a highly personal question. One person’s luxury might be another’s bare necessity. It’s a question that the Association of Superannuation Funds of Australia (ASFA) attempts to answer several times a year in their Retirement Standard.
The ASFA Retirement Standard benchmarks the annual budget needed by Australians to fund either a comfortable or modest standard of living in the post-work years. It is updated quarterly to reflect inflation.
So what are your retirement plans: modest or comfortable? Let’s take a look at what that means.
According to ASFA, a modest retirement lifestyle is one that would be better than the Age Pension, but you would still only able to afford fairly basic activities. For those aged 65 - 85, a modest lifestyle would cost a single person just over $24,000 per annum, while a couple could expect to spend around $34,800 per annum.1
Here’s how it breaks down for a couple (with figures rounded to the nearest dollar):
ASFA’s definition of comfort is a retirement lifestyle that enables an older, healthy retiree to be involved in a broad range of leisure and recreational activities. They can afford a good standard of living through the purchase of things like private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel.
Here’s how it breaks down:
The clear take out from this is that although the Retirement Standard is great for getting a ballpark idea of your retirement income, it’s ultimately a very subjective amount. When it comes to your own situation, working out a personal budget is a great idea.
Try our Retirement Income Calculator to make sure your retirement is on track.
1. All figures quoted sourced from the ASFA Retirement Standard, March quarter 2017 report, available at https://www.superannuation.asn.au/resources/retirement-standard
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