Retirement planning is one of the most important financial decisions in life. Many people ask a simple but confusing question: “How much money do I need to retire?”
This is where the ASFA Retirement Standard becomes useful.
The ASFA Retirement Standard is a practical guide that helps people understand how much money is needed to live a modest or comfortable life after retirement. Instead of guessing, it gives a clear idea of retirement living costs and how much savings may be required.
In this blog, you will learn:
- What the ASFA Retirement Standard means
- The difference between modest and comfortable retirement
- How much money singles and couples may need
- Easy examples with dollar calculations
- How to use this standard for your own retirement planning
This guide is written in easy language, with step-by-step explanations so anyone can understand it.
What Is the ASFA Retirement Standard?
The ASFA Retirement Standard is a benchmark that estimates the cost of living in retirement. It shows how much money retirees may need each year to maintain a certain lifestyle.
It does not tell you how much superannuation you personally must have. Instead, it gives a general guideline based on:
- Living expenses
- Lifestyle choices
- Whether you are single or a couple
- Whether you own your home
Think of it as a retirement budget guide, not a strict rule.
Why the ASFA Retirement Standard Is Important
Many people reach retirement age without knowing:
- How much they will spend each year
- Whether their savings will last
- If their lifestyle expectations are realistic
The ASFA Retirement Standard helps because it:
- Gives clarity instead of confusion
- Helps set realistic retirement goals
- Makes retirement planning easier
- Helps compare savings with expected expenses
Without a benchmark, retirement planning becomes guesswork.
Two Retirement Lifestyles Explained
The ASFA Retirement Standard divides retirement into two main lifestyle levels:
- Modest Lifestyle
- Comfortable Lifestyle
Let’s understand both in detail.
Modest Retirement Lifestyle Explained
A modest lifestyle covers basic living needs but leaves little room for luxury.
What a Modest Lifestyle Includes
- Basic groceries
- Essential clothing
- Utility bills (electricity, water, gas)
- Public transport or limited car use
- Basic health care
- Occasional low-cost leisure activities
What It Does NOT Include
- Regular holidays
- Expensive dining
- Luxury shopping
- Private health insurance extras
Example: Modest Lifestyle Cost
Let’s assume the yearly cost for a single person on a modest lifestyle is:
- Weekly cost: $550
- Annual cost:
$550 × 52 = $28,600 per year
For a couple:
- Weekly cost: $790
- Annual cost:
$790 × 52 = $41,080 per year
This lifestyle usually depends heavily on government pension support, with a small amount of personal savings.
Comfortable Retirement Lifestyle Explained
A comfortable lifestyle allows retirees to enjoy life with financial freedom and security.
What a Comfortable Lifestyle Includes
- Good quality food
- Dining out regularly
- Domestic and international travel
- Private health insurance
- A reliable car
- Entertainment and hobbies
- Home maintenance and upgrades
This lifestyle is what most people aim for.
Comfortable Lifestyle Cost With Dollar Calculations
For a Single Person
- Weekly spending: $1,100
- Annual cost:
$1,100 × 52 = $57,200 per year
For a Couple
- Weekly spending: $1,650
- Annual cost:
$1,650 × 52 = $85,800 per year
This level of spending provides comfort, dignity, and flexibility in retirement.
How Much Savings Are Needed for a Comfortable Retirement?
Now let’s convert annual spending into total retirement savings.
Simple Assumption
- Retirement age: 67
- Retirement duration: 25 years
- Investment return covers inflation
- Partial pension support is available
Example 1: Single Person
Annual spending: $57,200
Retirement years: 25
Total required income:
$57,200 × 25 = $1,430,000
If pension covers part of this, personal savings needed may be around:
$600,000 – $650,000
Example 2: Couple
Annual spending: $85,800
Retirement years: 25
Total required income:
$85,800 × 25 = $2,145,000
With partial pension support, savings required may be around:
$650,000 – $700,000 combined
These are guidelines, not exact rules.
Why Home Ownership Matters in Retirement
One important assumption in the ASFA Retirement Standard is home ownership.
If You Own Your Home
- No rent payments
- Lower monthly expenses
- More predictable costs
If You Rent
- Higher annual costs
- More savings needed
- Less financial stability
Example
Renting cost per year:
$400 per week × 52 = $20,800 extra per year
Over 25 years:
$20,800 × 25 = $520,000 extra needed
This shows how housing plays a major role in retirement planning.
Common Expenses Included in the ASFA Retirement Standard
The standard considers real-life expenses such as:
- Food and groceries
- Utilities
- Transport
- Health care
- Insurance
- Clothing
- Leisure and travel
- Household maintenance
These are realistic everyday costs, not luxury figures.
How Inflation Affects Retirement Costs
Inflation slowly increases the cost of living.
Example
If your expenses are $60,000 today:
- At 3% inflation, in 10 years:
$60,000 × 1.34 ≈ $80,400
This is why retirement planning must account for future price increases, not just today’s costs.
How to Use the ASFA Retirement Standard for Personal Planning
Here is a simple step-by-step method:
Step 1: Choose Your Lifestyle
- Modest or Comfortable
Step 2: Calculate Annual Spending
Use weekly × 52
Step 3: Estimate Retirement Years
Usually 20–30 years
Step 4: Compare With Current Savings
Check how close you are to the target
Step 5: Adjust Contributions
Increase savings if needed
Example: Personal Retirement Calculation
Let’s say:
- Age: 40
- Current savings: $120,000
- Target retirement savings: $650,000
- Years left: 27
Amount needed:
$650,000 − $120,000 = $530,000
Annual savings needed:
$530,000 ÷ 27 ≈ $19,600 per year
Monthly savings:
$19,600 ÷ 12 ≈ $1,633 per month
This makes the goal realistic and measurable.
Common Myths About the ASFA Retirement Standard
Myth 1: Everyone Needs the Same Amount
Truth: Lifestyle choices matter more than fixed numbers.
Myth 2: Pension Alone Is Enough
Truth: Pension supports basic needs, not comfort.
Myth 3: It’s Too Late to Plan
Truth: Even small changes help at any age.
Tips to Reach a Comfortable Retirement
- Start saving early
- Increase contributions gradually
- Reduce unnecessary debt
- Review spending habits
- Plan housing wisely
- Track progress every year
Small steps today create big comfort tomorrow.
Benefits of Using the ASFA Retirement Standard
- Clear financial direction
- Better retirement confidence
- Realistic goal setting
- Reduced financial stress
- Improved quality of life in retirement
It turns uncertainty into clarity.
Also Read: Couples Budgeting: Practical Guide to Manage Money Together
Final Thoughts
The ASFA Retirement Standard is a powerful tool for anyone who wants a secure and comfortable retirement. It does not promise exact outcomes, but it provides realistic guidance based on everyday living costs.
By understanding this standard, using simple dollar calculations, and planning early, you can take control of your financial future and enjoy retirement with peace of mind.
Retirement is not about surviving — it is about living well.