Australians will need significantly larger superannuation balances to fund a comfortable retirement, according to the latest Retirement Standard Report from the Association of Superannuation Funds of Australia (ASFA).
The updated benchmarks show that homeowners aged 67 now require $630,000 in super to support a comfortable retirement if single—up $35,000 from $595,000—and $730,000 if a couple, an increase of $40,000 from $690,000. ASFA said this marks the first rise in the comfortable retirement lump sum targets in three years.
ASFA chief executive Mary Delahunty said the increase reflects mounting cost-of-living pressures and inadequate growth in Age Pension support.
“Retirees’ living costs have risen, and support from the age pension has not kept pace with this rise. This means retirees need higher super savings to maintain a comfortable lifestyle,” Delahunty said.
ASFA noted that long-term super balances remain on track to grow. A 30-year-old worker with $30,000 in super today and earning $80,000 annually (in today’s dollars) across their career is projected to retire with $645,000.
“Australia’s super system is built on a bargain: you pay concessional tax rates if you save part of your income for retirement. That bargain is working exactly as intended, incentivising Australians to save for their own retirements and reducing reliance on government welfare payments,” Delahunty said.
According to the report, the higher lump sum targets are driven by two key factors: the Age Pension failing to keep pace with retirees’ cost of living, and the government’s recently announced increase in deeming rates.
“The age pension has not kept pace with the actual cost increases retirees face, particularly for essential goods and services,” Delahunty said.
“Costs in the categories retirees spend most on have risen faster than general consumer price inflation. As a result, even though the age pension is indexed, a greater burden falls on retirees’ personal super savings.”
The government recently confirmed changes to deeming rates—the assumed rates of return applied to financial assets when assessing Age Pension eligibility.
From 20 March 2026, the lower deeming rate will rise to 1.25 per cent (from 0.75 per cent) for financial assets below $64,200 for singles and $106,200 for couples. The upper rate will increase from 2.75 per cent to 3.25 per cent for assets above those thresholds.
These rates were last adjusted in September 2025, ending a five-year pandemic-era freeze during which deeming rates were set at 0.25 per cent and 2.25 per cent.
“When deeming rates rise, a person’s assessed income can increase even if their actual investment returns have not, which can reduce their age pension. This shifts more of a retiree’s budget towards reliance on super rather than Centrelink,” Delahunty said.
The lump sums required for a modest retirement have also risen, to $110,000 for singles and $120,000 for couples, compared with $100,000 previously for both groups.
ASFA’s latest Retirement Standard budgets indicate that homeowners aged 65 and over now need $77,375 per year for a comfortable retirement as a couple, and $54,840 as a single.
Retirees continue to experience higher inflation than the broader population, as they spend a larger share of their income on essential goods and services, where price increases have been strongest.
Rick Maggi CFP, Financial Advisor Perth, Westmount Financial