Sydney retirees relying on the private rental market for accommodation will need more than $1 million in superannuation savings, as will all retiree couples living in Australian capital cities, new figures showed.
The Association of Superannuation Funds of Australia (ASFA) Retirement Standard updates for the December 2016 quarter showed renting retirees in Sydney, both singles and couples, without a debt-free family home would need about $1,045,000 and $1,166,000 at retirement respectively to reach the ASFA comfortable standard.
Singles with their own home would need $545,000 while couples would need $640,000.
ASFA chief executive, Dr Martin Fahy said a single person renting privately in Sydney would need around $320,000 to support a modest standard of living in retirement while a couple would need $450,000.
ASFA estimates also showed a single retiree renting privately in a one-bedroom unit in Sydney would need to spend $62,434 annually to be comfortable while a couple renting a two-bedroom unit would need $79,801. Single homeowners would need $43,300 while couples would need $59,600.
“All estimates assume people are enjoying reasonable health, so any serious illness or disability makes the situation even more challenging, as does rental instability and associated costs,” Fahy said.
“Compulsory superannuation contributions at 9.5 per cent fall well short of what is needed to support a comfortable standard of living in retirement for anyone renting privately.”
Around three-quarters of households with the household head aged 65 and over own their home outright, while eight per cent were paying off a mortgage and around eight per cent rented privately.
Around 65 per cent of Sydney residents were homeowners by age 60 compared to just under 80 per cent for the rest of the country.