(This quirk where couples and singles require the same accumulated amount is because home owners can live modestly on the age pension with only a small super top-up.)
ASFA hasn’t crunched the annual spending or super savings required for renters to live to a more ‘comfortable’ retirement standard, which would include top private health cover, salon haircuts and confidence to run the air-con.
Mary Delahunty, chief executive of the Association of Superannuation Funds of Australia.Credit:
Actuary and superannuation expert Stephen Huppert says that’s because “the number would be too scary”.
ASFA chief Mary Delahunty explains that rent-related guidance numbers are only offered at the ‘modest’ level because people aiming for a ‘comfortable’ retirement don’t require this information.
“We wanted to provide guidance so we could talk for people without choices,” she says. “Structurally, as a nation, we need to solve the housing riddle. If people are renting as a choice – as my sister does so she can live near her grandchildren – then that’s different.”
The federal age pension pays just $30,646 a year for singles and $46,202 for couples after age 67. Rent assistance is available – up to $212 a week or $11,024 annually – but it’s clearly not enough to bridge the housing affordability gap.
Australia needs 266,300 affordable rental homes by 2041, according to WelcomeMat chief executive Matt Khoo.
“Affordable housing has an increasingly important role for people aged in their 50s, many of whom do not own their home and are currently renting,” he says.
He defines affordable housing as rentals priced 20 per cent below market rate – crucial for helping key workers like police and nurses live near their jobs, stay in work for longer and grow their retirement savings.
“The housing crisis is more than a headline, especially if you’re older, single and renting,” Huppert says.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their personal circumstances before making any financial decisions.
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