The Australian Securities and Investments Commission (ASIC) has changed its figures for how much retirees will need to live on its MoneySmart website after criticism of the estimates set by the Association of Superannuation Funds of Australia (AFA) in the recently released Retirement Income Review.
The Fin Review is reporting that the regulator updated the page on Monday night after the Review, led by former IMF director and senior Treasury bureaucrat Michael Callaghan, criticised ASFA and its modelling, saying it was only focused on the top 20% of earners.
ASFA’s Retirement Standard had recommended a lump sum of $640,000 for a couple and $545,000 for a single person to support a comfortable lifestyle.
However, Mr Callaghan’s Review found the figures amounted to “a standard of living higher than that experienced by most Australians during their working lives”.
The updated advice now lists the annual living costs for a modest retirement as $40,440 for a couple and $27,987 for a single person. For a comfortable retirement, the annual figure is now $62,083 for a couple and $43,901 for a single person.
The site also refers users to the Retirement Income Review for more information.
ASFA has been pushing for the planned increase in the superannuation guarantee from 9.5% to 12%, but the Review concluded that the current rate gives most Australians close to 90% of their working age salary in retirement.