Will you be comfortable living on the Age Pension?

There's a lot to keep on top of with day-to-day expenses, but it pays to spare a thought for tomorrow.

With so many pressing expenses―perhaps your children, house and living costs take up most of your thoughts―your super and retirement may not get much of a look-in.

But when the tax office takes a portion of your income, why not take some time today and make pre-tax or post-tax super contributions.

We tend to think short term

Research shows that most of us have blinkers on when it comes to looking ahead and doing the things we need to do to ensure a secure and happy future1.

But if you’re planning to rely only on employer super contributions, your retirement could end up looking very different to the one you’re imagining.

According to the Association of Superannuation Funds of Australia (ASFA) the Age Pension can’t be relied on for a modest retirement let alone a comfortable one2.

How much is the Age Pension?

The amount people receive from the government Age Pension depends on their income, assets, and other circumstances, and whether they’re single or not. The maximum pension payment amounts per fortnight are outlined below. 

Maximum pension payment amounts per fortnight 


Single person 

Couple (each)

Couple (combined)

Couple (each,

separated due to ill health)

  $867.00 $653.50  $1307.00 $867.00

Includes Pension Supplement and Energy Supplement. These supplements help to meet the costs of your daily household and living expenses including energy costs.

Source: http://www.humanservices.gov.au/customer/services/centrelink/age-pension?utm_id=7

Not enough for a comfortable lifestyle 

A modest retirement lifestyle is considered better than the Age Pension, but still one where people can afford fairly basic activities2.

A comfortable retirement means having much more than the Age Pension provides. This sort of retirement lifestyle enables an older, healthy retiree to be involved in a broad range of leisure and recreational activities and to have a good standard of living through the purchase of such things as; household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel2.

See the infographic below which compares the amounts required for modest and comfortable lifestyles. The amounts show budgets for those aged around 65 and are based on the assumption that they own their own home and are in relatively good health. You can also get some more information from our page, "how much super do I need?"

Source: ASFA Retirement Standard, March Quarter 2015, National

Start early and sort out your super

To enjoy a modest or comfortable lifestyle your super, in addition to the Aged Pension, is important. Super is a long-term savings strategy, so the earlier you start taking an interest in it the better.

Here are some other tips to make sure your older self enjoys a comfortable life:

1. Sort out your super—make sure you’re not losing money by paying extra fees for additional accounts. Consolidate your super and find any you’ve lost along the way so it’s earning money for you every day. 

2. Add small amounts to super over time and start early―it can make a really big difference. The good news is you may end up keeping money that would otherwise go to the tax office. Use our super simulator to see the difference salary sacrifice makes and read more about salary sacrifice.

3. You can also find a financial adviser to better understand how easy it can be to look after your future self, while also meeting all your day-to-day needs.

1 Healthy, Wealthy, and Wise, Retirement Planning Predicts Employee Health Improvements Timothy Gubler and Lamar Pierce, Olin Business School, Washington University in St. Louis.
2 http://www.superannuation.asn.au/resources/retirement-standard

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© AMP Life Limited. This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.