SUPERANNUATION

Renting in retirement? You'll need double the super

By Jamie Williamson

Published on December 9, 2025

A single person who rents in retirement will need almost double the superannuation balance of a homeowner, new research suggests.

According to calculations by Super Consumers Australia (SCA), a typical single retiree who rents will need $659,000 in super to ensure a "decent standard of living". For a couple, they would need a combined super balance of $786,000.

These numbers assume a single person rents a one-bedroom apartment and a couple rents either a one-bedroom or two-bedroom apartments in a capital city.

Renting in retirement? You'll need double the super

As at June 2025, the average rent paid by a single person for a typical one-bedroom apartment in Australia's capital cities was $470 a week; in Sydney, the average was $560. For couples, the average rent for a typical one or two-bedroom apartment was $500 and $590 in Sydney.

Assuming an average spending target of $63,000, SCA found single retiree renters would need to save more than one and a half times as much super as retirees who own their home, even in the cities with the cheapest rent. In some cases, they need to have a super balance that's as much as three times higher.

For couples, the findings were about the same.

Overall, due to skyrocketing rental prices, those who rent in retirement will need to spend 30 to 47% more than a homeowner to achieve the same standard of living.

According to the Australian Institute of Health and Welfare, there are over 325,000 Age Pensioners receiving Commonwealth Rent Assistance, of which 32% are still in rental stress - meaning they spend more than 33% of their income on their housing.

The maximum amount a single person can receive in rental assistance each year is $5600.40; however, most renters spend over $20,000 a year on rent. The Commonwealth Rent Assistance payment also only increased by 2% in the 12 months to September 2025, while rents rose by more than double that in the same period.

The difference homeownership makes

As mentioned, SCA found homeowners need much less in the way of total super savings heading into retirement.

For the typical single person, assuming they'd like to be able to spend $44,000 a year, SCA estimates a super balance of $322,000 - that's $337,000 less than a renter. For a couple looking to spend $47,000, the combined super balance required is $432,000 - a difference of $364,000.

The figures are based on the real spending habits of older Australians as collected by the Australian Bureau of Statistics and also assume the Age Pension covers a decent chunk of spending needs.

Unlike the many renters struggling with financial stress, SCA found 90% of retirees who own their home are satisfied or neutral about their financial situation.

Who to believe?

The Association of Super Funds of Australia (ASFA), considered to be the peak advocacy body for the superannuation sector, has been producing its own Retirement Standard for about two decades which is widely considered the industry benchmark.

However, whether you're a homeowner or a renter, ASFA's numbers stand in stark contrast to those produced by SCA.

The association says that homeowners looking to retire at age 67 and do so in comfort would need to have a combined $690,000 in super savings if a couple, and $595,000 if single.

For renters, singles - who are assumed to live a more modest lifestyle - would need a super balance of $340,000 while couples would need $385,000.

That's right, for a homeowner ASFA predicts much more is needed to fund a comfortable lifestyle but suggests far less is needed for renters than SCA believes.

And to top it off? As it stands, the total superannuation account balance for the average Australian approaching or already in retirement is $420,934 - apparently not nearly enough to retire in comfort, regardless of which set of standards you believe.

What can be done for renters?

This is the first time SCA has produced such numbers for renters. It says the findings demonstrate the need for systemic change, rather than advice to simply save more for retirement.

"The government must increase Commonwealth Rent Assistance, link it to rent CPI, and invest in housing designed for older Australians," SCA chief executive Xavier O'Halloran says.

Likewise, the Australian Council of Social Service says there are three key things the government must urgently do to address the growing risk of poverty and homelessness in retirement.

It would like to see:

The lowest income support payments such as Jobseeker and Youth Allowance increased to at least $589 per week (currently the minimum is $472.50 per week)
The maximum rates of Commonwealth Rent Assistance increased substantially to align with the cost of renting today (currently the maximum for a single person is $215.40 per fortnight)
A target set to increase the nation's supply of social housing nationally to at least its historical level of 6% of homes within a decade and 10% of homes in two decades to alleviate housing stress of people on low incomes

Finally, Housing for the Aged Action Group chief executive Fiona York agrees, pointing out that the retirement system was designed with the expectation that older people would own their home. In reality, the number of older people renting has increased by 73% since 2015.

"Living in expensive and poor-quality homes is impacting the health and wellbeing of older renters and preventing their ability to age well and with dignity," she says.

"We need to address this retirement divide, by building more public and community housing, reforming housing-related tax concessions, cap rent increases to no more than CPI and raising the rate of income support payments."

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The government has backed a Greens push to stop SMSFs using borrowed money to buy residential property, a move supporters say could help first-home buyers but critics warn will hurt retirement savers.

Comments

hH R

December 31, 2025 12.05am

how can you possibly cap rental increases to CPI, when the tradies have no limits on the rates they charge for the MANDATORY maintenance for a rental property? And Agent fees. And landlord insurance. And then let's talk about Landtax, which has jumped 30-40% in recent years. How on earth can you cap the rent when none of those costs are capped nor controlled?

J B

March 21, 2026 9.46pm

To the above comment I say fair points and acknowledge running a rental property has some real costs. Maintenance, agent fees, insurance, land tax. All legitimate and they add up. I present this as a counter argument from the renters perspective. I should also mention I am a previous home owner (sold in 2013 and renting ever since).

I don't blame landlords. Setting aside ethics and morals, landlords are simply operating within a system the government created. Yes, the system has been rigged from the start. A significant proportion of the people who write the rules are landlords themselves, often many times over. But using the tools available to you is rational behaviour. Most people would do the same.

The problem is the system itself, and the people we elect to run it. It was built to serve property owners, not the broader population. That needs to change.

Negative gearing allows rental losses to offset personal income, reducing both investment costs and tax bills. The 50% capital gains tax discount makes property one of the most tax advantaged investment vehicles available. These concessions cost taxpayers an estimated $15 to $20 billion every single year. 82% of that benefit flows to the top 10% of income earners. The bottom half receives around 4%. This is not a neutral system. It was built to ensure property always returns a profit for those who already own it.

And it works. Over 50 years, Australian house prices grew 3,435% while wages grew 1,183%. In Sydney today the median house price sits above $1.4 million. Saving a 20% deposit now takes over 12 years, up from around 6 years in the early 1990s.

So, asking how you can possibly cap rents when investor costs aren't capped is a fair question. It also overlooks the bigger picture. No one is asking landlords to run their properties as a charity, although notably, charitable donations are tax deductible.

The question is whether a system that generates $15 to $20 billion annually in tax advantages for property owners, while 32% of Age Pensioners receiving rent assistance are still in housing stress, is fit for purpose.

Property is an investment. Investments carry risk. Returns are never guaranteed. That's investing 101.

Most Australians would agree that housing security is a right, not a privilege. But right now Australia only protects that right if you own a home. We need to rebalance a system that excludes entire groups from ever owning one. Single parents, people on low incomes, Aboriginal and Torres Strait Islander communities, people with disability, older Australians, young people starting out. These are not edge cases. The 2021 Census recorded over 122,000 Australians homeless on any given night. Social housing waitlists sit above 169,000 households with no credible path to clearing them.

The number of older Australians renting has increased by 73% since 2015. That's not a lifestyle choice. That's people who never got the opportunity to buy, now facing retirement in a system that was never built for them.

None of this is the landlord's fault. But doing nothing doesn't hold things steady. It makes the divide worse every single year.

Landlords can't have it both ways forever. You can't accept billions in annual tax concessions designed to guarantee returns on your investment, and then argue renters should absorb whatever the market demands without guaranteeing housing security.

The costs of running a rental property are real. So is the cost of a system that tells an entire generation they will never own a home. Both things can be true but only one has had government policy protecting it for decades.

Renting in retirement? You'll need double the super