Living on the Age Pension: Real-Life Budgets for Australian Retirees
For many Australians, the Age Pension forms the cornerstone of their retirement income. But with the rising cost of living, a common question is: “Can I really live comfortably on the pension alone?”
The short answer: yes, but it takes planning, prioritisation, and sometimes a little creativity. Let’s break down what the Age Pension looks like in 2025 and explore realistic budgets for retirees.
How Much Is the Age Pension in 2025?
As of July 2025, the maximum fortnightly rates are:
Single: around $1,116 per fortnight (including supplements), or about $29,000 a year.
Couple (combined): around $1,680 per fortnight, or about $43,700 a year.
These amounts assume you receive the full Age Pension. If you have additional assets or income, your payments may be reduced under the assets or income test.
What Does “Comfortable” Mean in Retirement?
The Association of Superannuation Funds of Australia (ASFA) suggests two levels of retirement lifestyle:
Modest lifestyle: Covers basic living expenses, with a little extra for activities and the occasional treat.
Comfortable lifestyle: Allows for better quality of life, private health cover, regular dining out, and some travel.
According to ASFA’s Retirement Standard, a single person needs about $32,000 p.a. for a modest lifestyle, while a couple needs about $46,000 p.a.
👉 This means that for many retirees, the full Age Pension sits close to the “modest” lifestyle benchmark.
Real-Life Budgets for Retirees
Here are two example budgets for retirees relying primarily on the Age Pension:
1. Single Retiree – Living Modestly
Income: $29,000 p.a. (full pension)
Estimated annual expenses:
Housing (rates, utilities, maintenance): $8,000
Food & groceries: $7,000
Transport (car costs, fuel, insurance): $4,500
Healthcare & insurance: $3,500
Leisure & entertainment: $2,000
Clothing & household items: $1,500
Miscellaneous: $2,500
✅ Total: $29,000
This budget covers essentials but leaves little room for overseas travel or luxuries. Many singles find downsizing, renting, or house-sharing helps free up extra funds.
2. Couple Retirees – Balancing Comfort & Care
Income: $43,700 p.a. (full pension for a couple)
Estimated annual expenses:
Housing (rates, utilities, maintenance): $10,000
Food & groceries: $11,000
Transport (one car shared): $6,000
Healthcare & insurance: $5,500
Leisure & entertainment: $4,500
Travel (domestic holidays, occasional overseas): $3,500
Clothing & household items: $2,000
Miscellaneous: $1,200
✅ Total: $43,700
This budget allows for a modest but enjoyable lifestyle, including holidays and social activities, especially if retirees also have some superannuation or savings to top up.
Tips for Stretching the Age Pension Further
Concessions & discounts: Take full advantage of the Pensioner Concession Card, which reduces costs for utilities, healthcare, and public transport.
Review housing options: Downsizing or relocating to a regional area can free up money while reducing living costs.
Plan ahead for big expenses: Annual bills (like car rego, insurance, or rates) are easier to manage if you set aside a small amount each fortnight.
Supplement with part-time income: The Work Bonus allows pensioners to earn extra income without reducing pension payments (up to certain limits).
The Bottom Line
Living solely on the Age Pension in Australia isn’t always easy, but with careful budgeting, it can provide for a modest lifestyle. Couples often fare better than singles, and any additional savings, superannuation, or part-time income can make a big difference.
The key is to align your spending with what matters most to you—whether that’s travel, time with family, or simply enjoying the comfort of home.
