What does retirement actually cost?

Welcome to Edition 17 of The Retirement Rubicon. This edition is framed by a single persistent question: what does retirement actually cost, and is the superannuation sector's approach to answering it keeping pace with the reality members face?

ASFA's latest update to its Retirement Standard lands against a backdrop of entrenched cost-of-living pressures, particularly for the growing cohort of retirees who do not own their homes outright. And AMP's new Lifetime Retirement Income package, an ambitious integrated retirement solution, represents one provider's answer to how the industry might begin to close the gap between what retirement costs and what super can reasonably deliver.

Taken together, these two developments highlight the challenge we face as an industry from measurement of retirement adequacy to the mechanics of funding it.

ASFA has released its March quarter 2026 update to the Retirement Standard, Australia's benchmark guide to retirement expenditure. For couples aged 65-84, a ‘Comfortable’ retirement lifestyle now requires $78,566 per year, with singles needing $55,923. For a ‘Modest’ lifestyle, couples require $52,473 and singles $36,434.

These figures assume unencumbered home ownership in retirement which, as we unpacked in 2023, proves ever more fraught with each passing year.

And so to ASFA’s credit, the update includes ASFA's ‘Modest Renter’ lifestyle, first introduced in June last year: $69,002 per year for couples and $51,164 for singles renting privately. As the Standard itself illustrates, these renter budgets sit far closer to the ‘Comfortable’ homeowner benchmarks than to their ‘Modest’ equivalents: a quiet but pointed acknowledgement of the retirement affordability gap facing private market renters.

On capital adequacy, ASFA estimates couples need $730,000 in superannuation at age 67 to fund a comfortable retirement, with singles requiring $630,000. The modest retirement thresholds are considerably lower at $120,000 and $110,000 respectively, reflecting the significant role of the Age Pension at this lifestyle level.

Renters targeting a modest lifestyle face a substantially higher savings requirement: $385,000 for couples and $340,000 for singles, reflecting the reality of median private rents that now range from $609 per week in Hobart ($31,668 pa) to $824 per week in Sydney ($42,848 pa).

Regular readers will recall that in February, we expressed some scepticism (TTR #3: Super switching “red flags” are on the table ) about fixed retirement budget standards as a universal adequacy framework, and the March 2026 ASFA update does little to change that view.

ASFA’s decision last year to relax its 20-plus year assumption of unencumbered homeownership in retirement is a positive step, but it does surface an uncomfortable truth: retiring to a housing tenure other than that requires a different read on adequacy.

As we noted in February, the ‘Modest Renter’ figures sit uncomfortably close to the ‘Comfortable’ homeowner benchmarks, quietly making the case that renting in retirement is structurally expensive rather than merely a lifestyle variation. Super Consumers Australia’s equivalent ‘Medium Renter’ budgets, updated in December 2025, land even higher, pointing to the absence of consensus on what retirement actually costs for this growing cohort.

The ASFA Comfortable standard continues to be the de facto benchmark across the industry: in adequacy modelling, retirement income projections, and increasingly in Retirement Income Strategy objective-setting. Yet as we argued in February, household retirement expenditure is fundamentally heterogeneous. A professional couple both on the top marginal tax rate will not find spending $78,566 per year particularly aspirational. Likewise, a single female on a modest wage may find a $630,000 target balance too onerous, possibly demotivating, and thus a potential trigger for disengagement from retirement planning altogether.

The Lumisara view remains aligned with the Retirement Income Review's replacement rate methodology: targeting 65% to 75% of pre-retirement disposable household income, applied through a household balance sheet lens integrating superannuation, the Age Pension, non-super assets and potentially some measure of housing equity for homeowners.

Fixed dollar benchmarks have their place as consumer-facing reference tools, but for funds committed to improving retirement outcomes across a diverse membership, a personalised income-replacement framing would better serve members than tracking progress toward a single headline number.

AMP Super has launched a new retirement package it describes as a market first, bringing together a lifetime income stream, a temporary income boost to support home care costs, and a digital financial advice journey to help members plan and manage their retirement income.

At the package's core is AMP Lifetime Retirement Income, a product designed to provide members with income certainty for life. AMP reports that members using a comparable lifetime income solution on its North platform spent an average of 60% more in retirement than equivalent non-lifetime members.

A notable new feature addresses aged care directly: members who qualify for high-level in-home care (Level 5 or above) can receive a 20% increase to their lifetime income for two years, providing additional support during what AMP acknowledges is a period of transition and uncertainty.

The product is available to all AMP Super members and is supported by a digital advice tool that guides members through retirement income projections and personalised strategy comparisons. AMP has been developing lifetime income capability since the 2022 launch of MyNorth Lifetime for advised members, followed by the Lifetime Super Boost solution for AMP Super members in June 2025, which we covered earlier this year.

AMP's Lifetime Retirement Income package is possibly the most structurally ambitious retirement solution launched in Australia this year, and to us, its most interesting design feature has less to do with the lifetime income stream.

The 20% home care income uplift for members reaching Level 5 in-home care eligibility is a genuine product innovation. Aged care cost risk is one of the most material and least-addressed dimensions of retirement income adequacy. Bolting a contingent income layer directly onto a lifetime income product, rather than leaving it as an afterthought for a separate insurance conversation, represents a meaningful step toward genuinely integrated retirement solutions.

Whether the two-year duration and 20% uplift rate will prove sufficient for members navigating the current 12-month average wait time for government-funded care support is a legitimate question, but the design intent is sound.

The package's digital advice journey is also worth watching. The Retirement Income Covenant has sharpened industry focus on retirement income strategy, but the advice access problem remains largely unsolved for most super fund members. AMP's attempt to embed personalised guidance into the product experience, rather than treating advice as a separate, friction-heavy engagement, reflects a pragmatic response to that gap.

What remains to be seen is how broadly this package penetrates AMP Super's membership without the adviser intermediary that has historically driven lifetime income product take-up. The 60% claim by AMP does, after all, draw on the MyNorth Lifetime experience, an advised population.

Replicating that engagement in a direct-to-member digital context will be the real test of this package's impact. That won’t be easy, but we acknowledge the ambition AMP is demonstrating in seeking to create a genuinely differentiated offering.