The magic number you’ll now need to live a comfortable retirement ... and don’t panic, it’s not $1m

If you’re hoping to draw a line under your working life come the new financial year next week — but you’re yet to run the numbers on exactly how much money you’re likely to splash about each year in retirement — rest easy.

The Association of Superannuation Funds of Australia is still doing the heavy lifting for you and reckons a so-called “comfortable” standard of living will now set couples in their mid-60s back $73,875 a year.

For a single, the group’s latest quarterly snapshot of the cost of living in retirement, released last week, is $52,383.

For comparison, Centrelink’s full age pension is currently $43,753 for couples and $29,024 for singles.

The cost of a comfortable retirement includes top-level health insurance, fast internet and streaming services, an above-average car, regular leisure activities, occasional restaurant meals, regular wardrobe updates, home repairs or upgrades, annual domestic travel and an overseas trip every seven years.

It also assumes the retirees own their own home.

When viewed as a total nest egg balance, a couple hoping to live a little and aim for a comfortable retirement will need $690,000. For a single, it’s $595,000.

But those approaching retirement without any of these magic numbers in their nest egg shouldn’t panic.

The figures often work in conjunction with supplemental income through a part-pension, and financial advisers also say it’s important to remember that annual spending falls as retirees get older.

The annual figures are up 1.6 per cent from the March quarter as the higher cost of meat, seafood, fruit and vegetables and electricity offset a near 8 per cent fall in the price of international travel and accommodation as peak season demand waned for trips to Europe in the December holiday period.

ASFA chief executive Mary Delahunty said while retirees were enjoying some relief from slowing inflation, essentials costs remained a concern.

“Australians in retirement are starting to benefit from a slowdown in inflation, but the prices of essentials are still rising,” Ms Delahunty said.

“It’s a timely reminder that achieving a dignified retirement takes planning, and superannuation plays a critical role in making that possible.”

A so-called modest standard of living for retirees now costs $48,184 for couples and $33,386 for singles.

That means basic health insurance and limited gap payments, basic mobile, modest internet data allowance, owning a cheaper, older, more basic car, few leisure or travel activities, limited home repairs and keeping a close eye on utility costs.

ASFA has been generating its Retirement Standard for two decades.

In a sign of the times as homeownership becomes beyond the reach of many people, with an increasing number of Australians likely to be renting in retirement, it has now added budgets for retirees living at the modest level in private rentals to the benchmark guide.

It estimates a single renter aged around 65 would need $46,663 a year, with a couple needing $64,259, to retire at a modest level.

The lump sums at retirement needed are estimated to be $340,000 for a single and $385,000 for a couple.

It said the budgets were significantly above what is provided by the full age pension and highlight the key role superannuation plays for retirees who rent.

“These new figures demonstrate how important it is that we build more homes in this country so Australians can buy a house or an apartment,” Ms Delahunty said..

“They also illustrate how super can be the difference between hardship and stability later in life, especially for renters, which is why we need to keep it safe for retirement.”