Every Australian dreams of a comfortable retirement, but how much superannuation is enough? The Association of Superannuation Funds of Australia (ASFA) Retirement Standard has long served as the go-to guide for answering this critical question. With the 2025 update now released, it’s time to look at what’s changed, how it affects your retirement planning, and what practical steps you can take to future-proof your nest egg.
Understanding the ASFA Retirement Standard
The ASFA Retirement Standard is an annual benchmark that estimates the income singles and couples need to support either a ‘comfortable’ or ‘modest’ lifestyle in retirement. It’s based on real-world spending patterns, including the rising costs of healthcare, leisure, energy, and essential goods. The 2025 update takes into account persistent inflation, recent changes to government policy, and shifts in the Australian cost of living.
For the March 2025 quarter, ASFA estimates:
- Comfortable lifestyle: $72,148 per year for couples and $51,278 for singles
- Modest lifestyle: $46,246 per year for couples and $32,665 for singles
These figures assume retirees own their home outright and are relatively healthy. The comfortable budget covers private health insurance, household upgrades, dining out occasionally, and domestic holidays. The modest budget meets basic needs, but with fewer extras.
2025 Policy Changes and Their Impact
Several policy shifts and economic trends are influencing the ASFA numbers this year:
- Superannuation Guarantee (SG) rate: The SG rate rose to 12% in July 2025, meaning more money is flowing into workers’ super funds.
- Cost of living adjustments: Inflation remains stubbornly high, especially for groceries, insurance, and utilities, pushing up required retirement income.
- Age Pension changes: The government increased the Age Pension in March 2025, but it still falls short of ASFA’s comfortable standard.
- Downsizer contributions: The eligibility age for making downsizer contributions to super has been lowered to 55, offering more flexibility for pre-retirees looking to boost their savings.
These updates make it more important than ever to track your super balance and regularly assess whether you’re on course for the retirement you want.
How to Use the ASFA Standard in Your Planning
ASFA’s benchmarks are not just numbers—they’re practical tools for goal-setting and decision-making. Here’s how you can use them to your advantage:
- Set a target super balance: According to ASFA, a couple needs around $690,000 in super, while a single needs $595,000 to fund a comfortable retirement, assuming partial Age Pension eligibility.
- Track your progress: Most super funds let you compare your balance against ASFA targets. Use your online account to check in each year.
- Consider contributions: If you’re behind, explore salary sacrifice, personal contributions, or the government co-contribution scheme to boost your super.
- Plan for healthcare and housing: Rising health costs and housing repairs are big-ticket items. Factor these into your retirement budget, especially if you plan to age in place.
Remember, the ASFA Standard is a guide, not a rule. Your ideal retirement might cost more or less depending on your lifestyle, health, and family circumstances.
Real-World Example: The Smiths’ Retirement Journey
Let’s meet the Smiths, a couple from Newcastle, both 67 and recently retired. Their combined super balance is $740,000. Using the ASFA Retirement Standard, they budget for around $72,000 a year, aiming for the comfortable lifestyle. They supplement their super withdrawals with a partial Age Pension and keep a close eye on their spending, especially as energy bills and health insurance premiums climb. By making voluntary super contributions in their early 60s and downsizing from a family home, they’ve managed to stay on track—showing that the ASFA figures are achievable with proactive planning.
Conclusion
The ASFA Retirement Standard 2025 is more than just a set of numbers—it’s a wake-up call to start, or refresh, your retirement planning. With higher living costs and evolving policy settings, there’s no better time to check your super, adjust your savings strategies, and set your sights on the lifestyle you want. Your future self will thank you.
