Planning for a secure and fulfilling retirement requires more than just hope — it requires numbers. The ASFA retirement standard is one of Australia’s most widely used benchmarks for estimating how much income a retiree will realistically need. In 2025, rising costs and shifting economic conditions make understanding the ASFA retirement standard more important than ever.

In this post, Insight Advisory Group unpacks the ASFA retirement standard in 2025, explains how much superannuation you will likely need, explores the key risks, and offers practical guidance — all with insight from our retirement specialist, Scott Harvey.

What Is the ASFA Retirement Standard?

The ASFA retirement standard is produced by the Association of Superannuation Funds of Australia (ASFA) to estimate realistic living costs for retirees. It includes two retirement lifestyles:

Modest: covers basic needs plus moderate discretionary spending
Comfortable: includes more discretionary spending, travel, social activities, and modest luxuries

These benchmarks are updated quarterly by ASFA to reflect real-world costs for retirees aged 65–84. (superannuation.asn.au)

The ASFA retirement standard is more than a guideline — it’s a planning tool used by financial advisers, super funds, and individuals to model super targets, retirement drawdown strategies, and long-term financial security.

What’s New in the ASFA Retirement Standard for 2025

In 2025, the ASFA retirement standard has shifted to reflect higher living costs, especially in areas such as healthcare, utilities, and digital connectivity.

According to ASFA’s March quarter 2025 report, the comfortable lifestyle cost for a couple is approximately $73,875 per year, and for a single retiree, it’s $48,184 in today’s dollars. (superannuation.asn.au)
For those aiming for a modest lifestyle, ASFA’s March 2025 budgets highlight lower but still substantial costs, particularly in rent, food, and utilities. (superannuation.asn.au)
Financial Standard reported that retirement lifestyle costs continue to rise — for couples, a comfortable retirement now demands around $75,319 annually, up from earlier ASFA estimates. (financialstandard.com.au)

These updated figures illustrate that the ASFA retirement standard in 2025 is sensitive to inflation and rising cost pressures, particularly for essentials and discretionary items.

How Much Super Do You Need to Meet the ASFA Retirement Standard?

Translating the ASFA retirement standard into a superannuation target involves a few key assumptions. Here’s how to estimate what you might need:

Setting a superannuation target involves several key assumptions and calculations. By using the ASFA retirement standard as a benchmark, you can ensure your super savings align with realistic retirement income goals. Here’s a step-by-step guide to estimating what you might need:

1. Define Your Target Lifestyle

The first step is to decide the lifestyle you want in retirement. ASFA provides two standard benchmarks: modest and comfortable. A modest lifestyle covers essential living expenses, basic healthcare, and limited discretionary spending. A comfortable lifestyle includes discretionary spending, travel, entertainment, and social participation.

Your choice will directly influence the amount of super you need. For example, someone aiming for a comfortable lifestyle may plan to travel twice a year and dine out regularly, while a modest retirement might involve fewer discretionary activities. Being clear about your lifestyle aspirations allows you to create a realistic super target. (superannuation.asn.au)

2. Determine Your Income Needs

Once you have defined your lifestyle, calculate the annual income required to support it. For a comfortable ASFA retirement standard in 2025, this may range from $48,000 for a single retiree to $75,000 for a couple.

Consider all regular expenses, including utilities, healthcare, groceries, insurance, transport, and leisure activities. This annual income target is the basis for determining your super balance. Make sure to adjust for your specific circumstances, such as if you plan to downsize your home, relocate, or reduce spending in certain areas.

3. Estimate Other Income Sources

Superannuation is only one part of retirement income. You should account for other potential sources such as the Age Pension, dividends from investments, rental income, or part-time work. The Age Pension, for example, can provide a reliable income floor, reducing the total super you need to accumulate.

Including other income sources helps you calculate the net amount of super required to supplement your total retirement income and reach your desired lifestyle based on the ASFA retirement standard.

4. Model Withdrawal Rate

The withdrawal rate determines how much you can safely take out of your super each year without depleting your balance prematurely. A common assumption is a 4–5% annual drawdown rate over a retirement horizon of 20–30 years.

For example, if your super balance is $1.5 million and you withdraw 4% per year, that generates $60,000 annually. This rate balances the need for income with the goal of preserving capital to support a long retirement. Adjusting this rate based on your life expectancy, market conditions, and risk tolerance is essential to ensure your plan is sustainable.

5. Calculate Required Super Balance

With your annual income target and chosen withdrawal rate, you can estimate your required super balance using a simple formula:

Required Super Balance = Target Annual Income ÷ Withdrawal Rate

Example:

Target income: $60,000 per year
Withdrawal rate: 4%
Required super balance: $60,000 ÷ 0.04 = $1,500,000

From there, you can refine the target by factoring in longevity (how long you expect to live in retirement), inflation (to maintain purchasing power), and risk (market volatility or unexpected expenses).

6. Stress-Test Your Plan

Finally, it’s important to test your super plan against multiple scenarios:

Market volatility: What if returns are lower than expected for several years?
Inflation spikes: How would a sudden rise in living costs affect your withdrawals?
Unexpected costs: Health care emergencies or family obligations can strain your retirement funds.

By running these stress tests, you can adjust your super contributions, investment strategy, or planned retirement age to better meet the ASFA retirement standard.

Insights from Scott Harvey, Retirement Specialist at Insight Advisory Group

At Insight Advisory Group, Scott Harvey plays a central role in retirement planning. With deep experience in superannuation, financial planning, and wealth advisory, Scott helps clients translate the ASFA retirement standard into actionable strategies.

Scott’s approach includes:

Helping clients understand how the ASFA retirement standard translates to super account balances
Modelling super contribution paths (salary sacrifice, personal contributions) aimed at meeting ASFA-aligned goals
Integrating risk management, such as drawdown buffers and asset diversification, to protect super balances
Advising on the impact of part-time work, Age Pension, and longevity on retirement income based on the ASFA standard (ifpa.com.au)

By grounding his advice in the ASFA retirement standard, Scott ensures clients are planning for retirement with both realism and optimism.

Common Misconceptions About the ASFA Retirement Standard

Misconception 1: It’s Only for Wealthy Retirees
Many believe the ASFA retirement standard targets high net-worth retirees, but ASFA’s “comfortable” standard is actually a middle-class aspirational benchmark, not luxury. (moneysmart.gov.au)

Misconception 2: The Age Pension Will Cover Everything
While some retirees get a portion of the Age Pension, relying solely on it may leave gaps. The ASFA retirement standard assumes a combination of super drawdowns and part-pension for a comfortable standard. (superannuation.asn.au)

Misconception 3: You Don’t Need to Plan — Super Will Grow Enough
Passive reliance on super growth may not suffice. Without regular contributions and strategic planning, your super may fall short of what’s required to sustain the ASFA retirement standard over decades.

Misconception 4: ASFA Figures Don’t Reflect Real-Life Variability
ASFA provides averages and benchmarks; personal retirement costs may differ. But by using the ASFA retirement standard as a foundation — and adjusting for your own needs — you can build a more resilient plan.

Key Risks When Targeting the ASFA Retirement Standard

Longevity Risk: Retirees may outlive their super savings if they underestimate how long they will live.
Market Risk: Volatile markets can reduce super balances, which could jeopardize achieving ASFA-aligned income.
Inflation Risk: Higher inflation could erode purchasing power and make the ASFA standard less achievable without adjustment.
Unexpected Expenses: Healthcare, major repairs, or family costs may strain your retirement budget relative to ASFA projections.
Withdrawal Risk: Without a disciplined drawdown strategy based on the ASFA retirement standard, retirees may withdraw too aggressively or too conservatively.

Strategies to Work Toward the ASFA Retirement Standard

Boost Contributions
Consider increasing your super contributions through salary sacrifice or personal contributions to get closer to your ASFA-based goal.
Optimize Your Portfolio
Balance growth and defensive investments to generate sustainable returns that support a long-term drawdown strategy.
Model Multiple Scenarios
Use retirement planning software or work with an adviser like Scott Harvey to test different ASFA retirement standard outcomes (e.g., different rates of return or withdrawal rates).
Review Regularly
Revisit your retirement plan every 2–3 years to account for changes in the ASFA retirement standard, personal circumstances, or economic conditions.
Prepare for Surprises
Build in buffers for unexpected costs, and maintain flexibility in your retirement drawdown plan aligned with the ASFA retirement standard.

Frequently Asked Questions (FAQ)

Q: What is the lump sum needed to reach the ASFA retirement standard?
A: According to ASFA’s methodology, for a “comfortable” retirement at age 67, a single person needs about $595,000, while a couple needs around $690,000. (superannuation.asn.au)

Q: Do ASFA retirement standard figures apply in 2025?
A: Yes — ASFA publishes its standard quarterly. The March 2025 quarter figures reflect current cost-of-living pressures. (superannuation.asn.au)

Q: Can working in retirement reduce how much super I need?
A: Yes. According to ASFA research, many retirees plan to work past age 65 part-time, which can reduce the super you need to draw down. (asfa.asn.au)

Q: Does the ASFA retirement standard assume I own my home?
A: Yes, ASFA’s standard assumes home ownership in its comfortable and modest lifestyle models. (superannuation.asn.au)

Q: Are the ASFA retirement standard numbers gross or after-tax?
A: ASFA’s retirement standard is based on after-tax spending needs. (superannuation.asn.au)

Conclusion

The ASFA retirement standard remains a foundational tool for retirement planning in Australia. In 2025, with higher living costs and shifting economic dynamics, leveraging this standard can help you set realistic income goals, build your super with purpose, and manage retirement risks more effectively.

Our team at Insight Advisory Group, led by retirement specialist Scott Harvey, is dedicated to helping you navigate what the ASFA retirement standard means for your personal financial future. Whether you’re starting your super journey, evaluating your current retirement plan, or adjusting for the rising cost of living — we’re here to help.

Reach out to us to model your retirement path based on the ASFA retirement standard, and ensure your super strategy is aligned to the lifestyle you want in retirement.

ASFA Retirement Standard 2025: How Much You Need To Retire Comfortably

Table of Contents