Retirees to ‘feel the squeeze’ as living costs send standard soaring

Mounting cost-of-living pressures have forced retirees to tighten their budgets even further ahead of the Christmas period, as the latest Association of Superannuation Funds of Australia (ASFA) Retirement Standard figures confirm the amount needed to retire ‘comfortably’ has hit a new record.

For the September quarter, the annual budget for those aged 65 and over to have a comfortable lifestyle in retirement reached $76,505 for a couple of $54,240 for a single, marking a 1.6 per cent and 1.8 per cent jump respectively from the previous quarter and 3.5 per cent and 3.6 per cent over the past 12 months.

Underpinning this increase were several price surges across various expenditure items, including eating out and takeaway (1.3 per cent), property rates (6.3 per cent), electricity (nine per cent), domestic holiday travel and accommodation (5.2 per cent), and audio, visual, media and services (9.3 per cent).

ASFA chief executive, Mary Delahunty, also flagged that the Consumer Price Index (CPI) had only risen by 1.3 per cent over the September quarter and 3.2 per cent over the previous year, indicating that retirees are “experiencing stronger price pressures than the general population because they spend more of their budget on essential items that have risen the most”.

“Retirees might be feeling the squeeze this Christmas because prices have risen fastest in the things they spend most on, like food, energy and health. Some older people may cut back on pricier gifts, travel and social occasions to stay on top of the basics,” she said.

“However, thanks to superannuation, most Australian retirees are living with additional income beyond the Age Pension each month, which makes them more financially resilient, including at financially stressful times of the year like Christmas.

“In many countries, retirees rely almost entirely on a state pension. In Australia, retirees’ own super savings sit on top of our state pension and provide a buffer. This means financial flexibility they would not have if they solely depended on monthly payments from the taxpayer.

“Fortunately for many retirees, it is the income they get from their superannuation savings that allows them to keep celebrating occasions like Christmas without having to worry about every dollar.”

Delahunty said recent superannuation policy reforms, such as increasing the super guarantee (SG) to 12 per cent and legislating payday super from 1 July 2026 – will only deliver even greater financial security and resilience for the generations approaching or in retirement, with the average superannuation account balance now at a record $172,834 across 18 million members aged 15 and over. For those aged 65 to 69, this figure climbs again to approximately $420,934 in retirement savings.

“More Australians than ever before are reaching retirement with meaningful super behind them, and recent reforms, including the move to 12 per cent super and Payday Super, will lift retirement security even further,” Delahunty said.

“The challenge now is to keep strengthening the system so every Australian has the best possible chance of a comfortable, dignified retirement, not just at Christmas but all year round. This will be ASFA’s North Star in 2026 and beyond.”