Money
The rising cost of retiring as a renter
New research shows renters face a tougher road to retirement, yet there are practical ways to strengthen your footing long before you clock off for good.
By Bron Maxabella
If you don’t own a home – and are banking on renting well into retirement – the latest report from Super Consumers Australia suggests you may face a significantly tougher future than home owners.
The new 2026 Retirement Savings Targets for Renters report finds that renters will need twice as much superannuation to enjoy the same retirement lifestyle as those who are mortgage-free. For example, a typical single retiree who rents might need around $659,000 in super to live comfortably – compared with about $322,000 for a homeowner. Couples face a similar disparity.
It’s a glaring signal that unless government support increases, renters are on shaky ground when it comes to retirement security.
“Telling renters to simply “save more” isn’t the solution to this problem” says Xavier O’Halloran, CEO of Super Consumers Australia. “[Renters] are at a real risk of retirement disaster if the government doesn’t act. Long term solutions need to focus on getting more people into affordable housing.”
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Why renting makes retirement much harder
Housing costs stay high when income falls
During working life, paying rent (or a mortgage) is balanced against income; in retirement, that balance often breaks. For renters relying on the pension, savings or super drawdowns, housing becomes a much greater portion of living costs – sometimes uncomfortably large.
Research from the Grattan Institute shows that retirees who rent privately are much more likely to fall into poverty or financial stress than retirees who own their homes. Many have little financial or superannuation buffer and some report net financial wealth under $25,000.
Government support doesn’t bridge the gap
Government support for renters – such as Commonwealth Rent Assistance (CRA) – was designed to help, but Super Consumers Australia found that as rents have skyrocketed the assistance has failed to keep pace.
CRA does not come close to covering the rental costs for people living in capital cities, the report found. For a single person, rent assistance is $5,600.40 per year, but rent is typically $19,700 or more per year.
As a result, many retired renters struggle to make ends meet even when receiving the maximum CRA rates. In fact, CRA increased by only 2% from September 2024 to September 2025, while rents rose 4.5% in the same period.
“We’ve got a crisis facing retirees right now, CRA has not kept pace with actual rents,” says O’Halloran. “We’re calling on the Minister for Social Services Tanya Plibersek to address rent assistance as a matter of urgency. Every day this isn’t addressed, renters face an impossible financial challenge in retirement.”
Declining home-ownership among older renters
Home ownership is no longer a given for all retirees. Over recent decades, a growing proportion of older Australians heads towards retirement without a roof they own, especially among lower-to-middle income households. That shift means the “typical retiree” demographic is splitting into two cohorts, with many home-owner retirees cashed-up while most renters enter retirement already disadvantaged.
What this means for you if you’re renting (or expect to rent in retirement)
“Retirement isn’t one-size-fits-all anymore. Whether you rent, own or share a home, the goal is building a plan that gives you control and flexibility. The earlier you run the numbers, the stronger your retirement outcomes tend to be,” says Ben Hillier, director of retirement at AMP.
If you’re a renter now – and likely to still be renting during retirement – data suggests you might face scenarios like:
- Double the savings target compared to a homeowner.
- Greater risk of financial stress or poverty in retirement (especially if you have low super or savings).
- Dependence on uncertain government support (CRA), which may not keep up with rental cost increases.
- Less flexibility for unexpected costs (including health and emergencies) given tighter cash flow when retired.
What pre-retirees who rent can do now to hedge risk
Which all sounds very doom and gloom, but there are a number of things you can do to mitigate the risk and better secure your retirement.
“There’s no need to panic if you’re heading toward retirement without owning a home," says Hillier. "What matters is taking stock early and working through your options, whether that's boosting super to exploring different housing arrangements. With the right plan, you can create stability and confidence in the years ahead.”
Here are some practical things renters can do now to better prepare for retirement.
- Aim to save or invest more than the “standard” super target. While this might feel impossible, there are many tax-savvy superannuation contribution schemes you can use to your advantage. For example, if you are on the 37% + 2% Medicare levy marginal tax rate, salary-sacrificing an extra $1000 into your super means you’ll save $390 in tax, so your take-home pay drops by only $610. Super will still deduct the 15% contributions tax once the money lands in your fund, but from your pay packet’s point of view, the cost of putting $1000 into super is about $610.
- Build a mix of income streams. Aim for diversity both within your super fund (talk to your fund about your investment options), and also outside of it in savings, investments, part-time work or consulting. If that sounds daunting, it’s worth talking to a financial adviser about your options.
- Consider co-ownership options. Teaming up with another retiree – a close friend, sibling or like-minded acquaintance – lets you pool resources to buy a property neither of you could comfortably purchase alone. The key, of course, is doing it with eyes wide open: get independent legal advice and ensure you have a shared understanding of boundaries and expectations. Done thoughtfully, co-ownership can create both security and companionship in a life stage where those things matter more than ever. If it’s the first time you’ve ever bought a home, you may also qualify for one of the government’s first home buyer schemes.
- Review (or consider) alternative renting strategies. If rent costs are high and likely to increase, could you potentially down-size to a cheaper rental, take on a flatmate, or move to a more affordable suburb, area or region?
- Factor in buffer for unexpected expenses. This makes sense whether you’re renter or home-owner in retirement. Don’t assume your costs will stay the same in future as they are now: healthcare, inflation and rising rent all need to be factored into your plans.
- If you’re worried about rent assistance: know your options, stay informed about policy changes, become an advocate for change and, above all, factor less-than-ideal support into your retirement plan.
If you rent now – or expect to retire renting – the comfortable retirement many take for granted may be harder to achieve because the system favours home owners. That doesn’t mean you’re doomed, but it does mean you need a sharper strategy. The time to plan is now as it’s far better to build financial resilience long before it becomes non-negotiable.
This article is an edited version of one that originally appeared on LifeSherpa. It contains general information only. It is not financial advice and is not intended to influence readers’ decisions about any financial products or investments. Readers’ personal circumstances have not been taken into account and they should always seek their own professional financial and taxation advice that takes into account their financial circumstances, objectives and needs.
Feature image: iStock/Alvaro Moreno Perez
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