Australian renters need over $1 million in super to retire comfortably
Single retirees renting in Sydney need more money in superannuation than those in any other capital city.
As property prices continue to soar, the Association of Superannuation Funds of Australia (ASFA) Retirement Standard report delivers more bad news for Aussie renters, particularly those in Sydney.
The Retirement Standard for the December 2016 quarter reveals singles renting in Sydney need a lump sum of $1,045,000 when retiring, in order to live a comfortable lifestyle by ASFA’s standards. Couples need $1,166,000.
In comparison, single Sydneysiders fortunate enough to own their own home only need $545,000 in retirement to enjoy the same standard of living. For Sydney couples, that figure jumps to $640,000.
Next in line is Canberra, where single renters need $977,000 at retirement to achieve a comfortable standard of living, followed by Melbourne and Brisbane where singles without their own home need a lump sum of $940,000 each.
All Australian couples renting in capital cities who don’t own their home need over $1 million in super to enjoy a comfortable retirement. The below table shows how much money is needed annually and at retirement for couples who are renting to achieve a comfortable standard of living set by ASFA.
“Housing affordability and availability is a significant and increasing concern for many Australians and particularly impacts older Australians grappling with the private rental market,” said ASFA CEO Dr Martin Fahy.
“Compulsory superannuation contributions at 9.5% fall well short of what is needed to support a comfortable standard of living in retirement for anyone renting privately,” said Fahy.
This is of particular concern for those renting in Sydney, where only 65% of residents own their own home by the time they’re 65, compared to almost 80% for the rest of Australia.