Unfortunately for Sydneysiders, housing affordability is a particularly serious challenge. Only 65% of Sydney residents are homeowners by the age of 60, compared to 80% for the rest of the country.
To retire comfortably in a privately rented home in Sydney, ASFA says single retirees need more than $1 million in superannuation to meet a higher cost of living than homeowners – around $62,400/year.
The annual costs for a couple renting a 2-bedroom Sydney unit amount to $79,801/year.
In other capital cities, renting retiree couples will also require over $1 million in super savings, but single retirees won’t.
ASFA Chief Executive Officer, Dr Martin Fahy, said whether single or in a couple, renting retirees in Sydney are at a significant financial disadvantage.
According to Fahy, single renters in Sydney would require $1,045,000 at retirement to reach the ASFA comfortable standard, while couples need $1,166,000.
“This compares to $545,000 for a single and $640,000 for a couple who own their own home,” Fahy said.
“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.”
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9.5% super contributions “fall well short of what is needed” for older renters
Fahy pointed out that 1 in 12 Australians over 65 years old live in private rentals.
“Housing affordability and availability is a significant and increasing concern for many Australians and particularly impacts older Australians grappling with the private rental market,” he 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.”
Looking at basic living costs faced by all retirees, some of the most significant price rises from the report showed automotive fuel has risen by 6.7%, with domestic holiday travel and accommodation rising by 5.5%.
The figures speak for themselves, with the money required to live a “comfortable” lifestyle almost doubling the same money required for a “modest” lifestyle.