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With Australians living longer and retirement costs rising, is the Age Pension enough to maintain a comfortable lifestyle? 

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Australia’s ageing population

As people live longer, there’s increased demand for aged care and support services – and with retirement savings needing to stretch further, many retirees are exploring smarter strategies to maintain their lifestyle and independence.

Is the Age Pension enough?

The Age Pension remains a vital safety net. As of 21 May 2025, the maximum full Age Pension is:

• $1,149 per fortnight (about $29,874 per year) for singles; and
• $1,732.20 combined per fortnight (about $45,037 per year) for couples.

However, even with indexed increases, the pension doesn’t always keep pace with what’s needed for a comfortable retirement.

Comparing different lifestyles

The latest ASFA Retirement Standard (March 2025 quarter) highlights that retirees aged 65-84 need:

For singles:

• approximately $33,386 a year to live modestly; or
• approximately $52,383 a year for a comfortable lifestyle.

For couples:

• approximately $48,184 a year to live modestly; or
• approximately $73,875 for a comfortable lifestyle.

A modest retirement typically covers essentials like basic health insurance, some outings, and keeping a close eye on utility bills, while a comfortable retirement might include private health cover, regular leisure activities, a reliable car, and occasional dining out or travel.

lone, especially with Australia’s current cost-of-living, usually means a much more basic lifestyle.

ASFA has been the trusted benchmark for retirement costs for over 20 years and here’s a quick snapshot from them to illustrate what each level of retirement income can support:

Aspect	Comfortable Lifestyle	Modest Lifestyle	Age Pension Lifestyle
Health Insurance	Top-level private health insurance	Basic private health insurance, limited gap payments	No private health insurance
Technology & Connectivity	Fast, reliable internet & smartphone	Basic mobile and modest internet data allowance	Very basic mobile and limited internet connectivity
Transport	Own a reasonable car with insurance and upkeep	Own a cheaper, older car	Limited budget to own, maintain or repair a car
Leisure Activities	Regular cinema visits, club memberships, dance/yoga classes	Infrequent leisure activities, occasional cinema trips	Rare trips to the cinema
Home Maintenance	Regular repairs and updates (kitchen, bathroom, appliances)	Limited budget for home repairs and appliances	Struggle to pay for repairs (e.g., leaky roof)
Personal Care	Regular professional haircuts	Budget haircuts	Less frequent or self-haircuts
Utilities & Heating	Comfortable use of air conditioning and utilities	Need to closely monitor and limit utility use	Limited budget for home heating
Dining & Socialising	Occasional restaurant meals, home delivery, takeaway coffee	Limited meals out, infrequent take-away	Only local club special meals or inexpensive take-away
Clothing & Footwear	Modest wardrobe updates	Limited budget to replace or update items	Very basic clothing and footwear budget
Travel & Holidays	Annual domestic trip, overseas trip every 7 years	Annual domestic trip or short breaks	Occasional short break or day trip in own city

While the Age Pension provides important support, many retirees look for smart ways to make it go further and meet their changing needs.

Your home: A valuable asset with untapped potential

Downsizing can release some equity, but many retirees prefer to stay in their own home as they age.

• Research by RMIT shows that 93% of older Australian homeowners want to remain in home ownership.
• Almost 90% wish to ‘age in place’ – living safely and comfortably in their own home as they get older.

For many older Australians, enjoying a safe and comfortable home is a top priority, yet more than a third live in houses that could benefit from age-friendly upgrades. While nearly one in three find these changes challenging to afford, there are practical solutions available to help bridge the gap.

That’s where Reverse Mortgages can help.

What is a Heartland Bank Reverse Mortgage?

A Heartland Bank Reverse Mortgage is designed specifically for people over 55 to access the equity in their home without needing to sell or move out. It’s a lifetime loan – allowing you to stay in your home for as long as you wish.

Unlike traditional loans, there are no monthly repayments required. Instead, the loan and interest are repaid only when the property is sold, you move into aged care, or pass away. You can also make voluntary repayments whenever you like.

Why are Reverse Mortgages such a good solution?

Heartland Bank offers flexible Reverse Mortgage options tailored to your needs:

• Flexible drawdown options: access funds as a lump sum, regular payments, or set up a cash reserve
• Support for home care and aged care: funds can be used for in-home care or to help cover aged care costs
• Refinancing options: we can refinance your existing mortgage – even a reverse mortgage – or lend against an investment property
• Stay in control: live comfortably and independently without monthly repayments hanging over you. Instead repay your loan when you move permanently from your home

Meeting the needs of Australia’s ageing population

With the rapid growth of older Australians and increasing costs of living, Reverse Mortgages are becoming an important tool for many retirees to fund their lifestyle, access care, and maintain independence.

Thinking about your retirement options?

If you’d like to learn more about how a Heartland Bank Reverse Mortgage can work for you or make the most out of your existing reverse mortgage, get in touch with our team on 1300 889 338 between 8.30am and 4.30pm EST/EDT Monday to Friday.

Applications are subject to eligibility and assessment. Terms, conditions, fees, and charges apply. Any advice is general and doesn’t consider your personal situation. Credit provided by Heartland Bank Australia Limited ABN 54 087 651 750 (Australian Credit Licence 245606) or ASF Custodians Pty Ltd ABN 49 106 822 780 (Australian Credit Licence 386781).

Sources:

• https://www.superannuation.asn.au/consumers/retirement-standard/
• https://www.servicesaustralia.gov.au/how-much-age-pension-you-can-get?context=22526
• https://treasury.gov.au/sites/default/files/2023-08/p2023-435150.pdf