Australian retirement cost of living pressures, Digi Mart USA News (Australia): The dream of retirement is turning into a nightmare for many households in Australia, as uncertainty and soaring living costs undermine financial security in old age.
According to a new survey, the percentage of pensioners who say they live comfortably decreased from 58 per cent in 2025 to 38 per cent in 2026. The concern extends beyond those already retired, as only 28 per cent of people approaching retirement reported feeling “prepared” financially.
The survey, Brighter Super’s Investment Trends 2026 Retirement Income Report, was based on responses from 4,007 people in Australia aged 40 and over, including 1,665 retirees, collected in August and September 2026. The share of those who feel prepared for retirement fell by 10 per cent compared with last year, to 28 per cent, the lowest level in the past decade.
Another 27 per cent of those approaching retirement say they are completely unprepared, a decade high, up from 18 per cent in 2025. Both groups cited inflation and the cost of living as the factors with the greatest impact on their finances in 2026, at 75 per cent and 72 per cent respectively.
Among retirees, the share who have difficulty meeting financial obligations more than tripled in one year, from 4 per cent to 13 per cent. The share very worried that savings will not last rose from 6 per cent to 18 per cent, and those who barely manage basic expenses or face greater difficulties more than doubled, from 14 per cent to 30 per cent.
Retirees’ confidence that they have enough money to fund their retirement fell from 60 per cent to 41 per cent. Confidence varied by super balance, rising from 26 per cent among retirees with less than $100,000 to 90 per cent among those with more than $750,000.
The report found that pre-retirees who had received financial advice were more than twice as likely to increase super contributions as those not interested in advice (37 per cent versus 15 per cent). Retirees who began planning before age 40 were much more likely to live comfortably (64 per cent) than those who had not actively planned (17 per cent).
Investment Trends head of research Julian Cappe said financial pressure is reaching people at every stage. Almost half plan to cut spending (49 per cent), more than double the rate in 2025 and 2024, while 48 per cent expect to retire later than planned and 40 per cent intend to increase super contributions.
Cappe said that for 54 per cent of pre-retirees facing an income gap, the choice is a more modest or later retirement.
The Association of Superannuation Funds of Australia (ASFA) also highlighted the difficulties pensioners face. ASFA CEO Mary Delahunty said retirees are among the groups hit hardest by the cost-of-living crisis because their budgets are weighted toward the items rising fastest in price.
ASFA said the Age Pension, which is adjusted twice a year, does not cover costs such as private health insurance, car costs and holidays.
According to ASFA, a couple aged 65 to 84 who own a home need $1,513.37 per week, or $78,998 per year, for a comfortable retirement. A single homeowner needs $1,075.98 per week, or $56,166 per year.
The budget for a modest retirement is $52,690 per year for couples and $36,548 per year for singles. Renters need more for a modest retirement: $69,376 per year for couples and $51,418 for single renters.
The Age Pension covers approximately 60 per cent of the comfortable-retirement budget for a couple and 56 per cent for a pensioner living alone, ASFA estimated. Delahunty said the pension guarantees no older Australian has to live in poverty but was never designed to fund the lifestyle most Australians aspire to.
The concern is compounded by reports of delays in home care packages for the elderly, nursing home bed shortages, and fees for “upgraded services” under the Higher Everyday Living Fees (HELF) program. ABC reported receiving HELF price lists from almost a dozen aged care providers and forwarded the data to the Aged Care Quality and Safety Commission.
Examples cited include a nursing home charging $42 per day, or $15,330 per year, for an upgraded meal package, and another charging $32.43 per day, or more than $11,800 per year, for barista-style coffee. Other fees include $70 for a monthly barbecue and $4.50 for a meal delivered to a room.
