Retirement just got more expensive

Regular readers of this blog will be familiar with the Retirement Standard released by the Association of Superannuation Funds of Australia (ASFA) each quarter.

The Retirement Standard provides a detailed budget of the estimated minimum living cost to support a comfortable and a modest lifestyle for both a single person and a couple aged around 67. Additional estimates are provided for people aged 85+.

The Standard was first published in 2004.

The figures for December 2021 have just been released and they show an increase in living costs.

For those who own their own home, the December 2021 figures are:

Comfortable lifestyle


Modest lifestyle












The cost of living for a single person or a couple aged 85+ is estimated to be around 6 – 7% less than the figures mentioned in the table.

In the December 2021 quarter, the increase in living costs were attributed to:

  • fuel (6.6%),
  • motor vehicles (1.9%),
  • meals out (1.0%),
  • dairy and related products (1.7%),
  • non-durable household products (3.7%),
  • domestic and household services (1.3%), and
  • domestic holiday travel and accommodation (4.8%).

In all, in 2021, prices increased by around 3.5% for a couple on a comfortable budget to 3.9% for singles on a comfortable budget.  

When considering the financial resources needed to support the different lifestyles, ASFA believes that a single person and a couple seeking a modest lifestyle will need to have around $70,000 in super. For people eligible for the full rate of age pension, only a modest amount of additional savings is required to top up the difference between the budgeted income required, and the full rate of age pension.

However, for those aspiring to a comfortable lifestyle, considerable personal savings, most likely held in super, will be required to generate the required income. In fact, ASFA suggests the additional savings will be in the vicinity of $640,000 for a couple, and $545,000 for a single person.

Importantly, if a single homeowner has assessable assets of more than $593,000, they will not qualify for any age pension. Therefore, a single with $545,000 in super is unlikely to receive any age pension if their other assets (car, bank, personal effects) amount to more than $48,000.

On the other hand, a home-owing couple with $640,000 in super and other assets totalling (say) $50,000, would still be eligible to receive a combined age pension of $15,692 per year.

When it comes to planning for retirement, managing cash flow both now and into the future can be very challenging. On too many occasions we see situations where people aspire to a particular lifestyle in retirement however their financial resources simply won’t provide the level of income they need.

Often this can be overcome by starting the planning process earlier and by having realistic expectations.

For most Australians, retirement will last for decades. As they say, “the final pay cheque must last for a very long time”.

Starting the retirement planning process early and being open to new ideas, such as downsizing or maintaining some form of post-retirement workplace connection, even if only on a part-time basis, can make a huge difference between living out your retirement on your terms as opposed to struggling to make ends meet.

Put yourself in control of your future. You are never too young to start planning for your retirement.