Save an extra $100K-plus in super, ASFA says

The figures for the June quarter show a modest rise in the cost for living for retirees, with couples aged around 65 living a comfortable retirement needing to spend $58,784 per year and singles $42,861, an increase of 0.6 per cent and 0.7 per cent on the previous quarter.

ASFA chief executive Pauline Vamos said increasing cost pressures, greater life expectancy and the recently legislated changes to the age pension test have all had an impact on the estimated savings that Australians will need to live a comfortable retirement.

"In particular, adjustments to the taper rate and thresholds for the assets test will impact how people plan to fund their retirement,” said Ms Vamos.

“While some individuals with relatively low retirement savings will receive a small increase in their age pension after 1 January 2017, others will receive a lower age pension, or none at all, until they run down their superannuation.”

As a result many individuals and couples will require higher levels of private savings for a comfortable standard of living in retirement, she said.

"If there are further increases to the eligibility age for the age pension beyond what is already legislated and a lower indexation factor is applied to future increases in the age pension, those retirement savings targets will [need to] increase further," Ms Vamos said.

According to ASFA, the most significant price increases for retirees this quarter were automotive fuel, increasing by 12.2 per cent and medical and hospital services, rising by 4.5 per cent.

"Given the increasing level of super savings that the average Australian will require at retirement, ASFA considers that there is a strong case to increase the compulsory rate of superannuation contributions to 12 per cent of wages as soon as possible,” said Ms Vamos.

She also urged individuals to make voluntary contributions.