Brisbane, Sydney, Perth and Melbourne ranked as among the most expensive places in the world to retire

Australia isn’t just home to unaffordable housing – it’s also a very expensive place to retire on a global scale.

Brisbane, Sydney, Perth and Melbourne make up four of the 10 worst places to age in a cost-of-living crisis – even for those living modestly without regular overseas holidays and cruises.

The study by UK insurer Shepherds Friendly puts these Australian capitals in the same league as Zurich, London and Singapore.

Australia isn’t just home to unaffordable housing – it’s also a very expensive place to retire (stock image)

Brisbane was in third place – behind Zurich in Switzerland and the Icelandic capital Reykjavik – with $386,000 needed to retire, based on Australian dollars (pictured is Story Bridge)

Brisbane was in third place – behind only Zurich in Switzerland and Iceland’s capital Reykjavik – with $386,000 needed for an individual to retire, in Australian dollar terms.

Sydney was in fourth place with $383,179 claimed.

Perth was in eighth place with $369,048 needed for retirement, while Melbourne was 10th with $365,424 needed.

Shepherds Friendly’s retirement recommendations were based on life expectancy and living costs in 46 cities included in the World Happiness Report.

The sums required were considered expensive by world standards, although they were well below the Superannuation Funds Association of Australia threshold of $595,000 for a comfortable retirement.

They were closer to the $258,000 Super Consumer Australia level recommended for a modest retirement, where someone vacations in Australia rather than going overseas every year or two.

Men aged 60 to 64 had an average super balance of $211,996 in 2020-21, compared with $158,806 for women, tax office figures showed.

Both levels are below the levels recommended by Shepherds Friendly.

Pension savings shrank in September for the second consecutive month, with a SuperRatings report showing a 1.8 percent drop last month for balanced funds with a 60 to 76 percent orientation toward growth assets.

SuperRatings chief executive Kirby Rappell said the Israel-Hamas conflict was likely to create more uncertainty for pension balances in the coming months, as high inflation fueled concerns about a possible Reserve Bank interest rate hike.

“The trajectory for interest rates and geopolitical tensions are likely to remain the dominant drivers of pension returns over the coming months,” he said.

Westpac’s new chief economist, Luci Ellis, a former Reserve Bank assistant governor, said another rate hike was a possibility if inflation in the September quarter showed no signs of moderating.

“A surprise there could prompt a revision of their forecasts in November and — if it’s a big enough surprise — be considered at the November board meeting,” she said.

Another rate rise – taking the RBA’s cash rate to a 12-year high of 4.35 per cent – would be good for bank savings but bad for pension balance sheets because stock market returns they would be weaker.

Sydney was in fourth place with $383,179 in demand (pictured is The Rocks under the Harbor Bridge)

Perth was in eighth place with $369,048 needed for retirement (pictured is the Swan River at night)

While Melbourne was in 10th place with $365,424 recommended (pictured is Flinders Street Station)

The Australian Prudential Regulation Authority this week published its superannuation fund proposal to provide more detail on how superannuation savings are invested.

“Under these proposals, members would have a clearer and more detailed view of how their money is spent and invested, while trustees would be further forced to remain narrowly focused on improving member outcomes,” it said. APRA vice president Margaret Cole.

Australians born from 1957 onwards qualify for the superannuation at age 67 and the mandatory employer pension has been at 11 per cent since 1 July.

Australian retirees often leave Australia’s expensive big cities for a less expensive regional area after selling their home to boost their savings.

Sydney and Melbourne are among the 10 least affordable cities in US housing research group Demographia’s global list, comparing median house prices to median household incomes.