You could afford to buy a house in Sydney with the superannuation savings needed to retire comfortably in a rented home in the city, new figures show.
The Association of Superannuation Funds of Australia’s Retirement Standard report for December shows superannuation savings of about $1.04 million are needed for singles and $1.16 million for couples to retire comfortably in a rented home in Sydney.
The current median house price in Sydney is $928,000, according to the latest CoreLogic data.
The Association of Superannuation Funds of Australia’s Retirement Standard report for December shows that the cost of living for a single retiree in a one-bedroom unit in Sydney is about $62,434 a year.
For a retired couple in a rented two-bedder the annual cost of living is about $79,801.
Homeowners have a much better situation thanks to not having to pay rent: annual Sydney living costs are $43,300 for single retired homeowners and $59,600 for couples.
ASFA chief executive Martin Fahy says retirees planning to live a comfortable retirement in a rented home in most Australian capitals will need to save a lump sum of superannuation of about $1 million.
That’s about double the required retirement savings lump sum needed by homeowners.
“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,” Dr Fahy said.
Dr Fahy said the average savings needed to retire comfortably in a rental home in Melbourne, Brisbane, Canberra and Perth are quite similar to the amount needed in Sydney.
ASFA figures show that even living a modest retirement lifestyle and renting would require a large superannuation savings balance.
For singles the sum required would be $320,000 in Sydney, $325,000 in Melbourne, $325,000 in Brisbane and up to $352,000 in Canberra.
The sum for modest couples would be $450,000 in Sydney, $396,000 in Melbourne, $395,000 in Brisbane and $376,000 in Canberra.
He said only in Hobart or Adelaide would the cost of renting be cheaper, with substantially lower rents possible in regional areas.