The age pension will rise tomorrow, giving singles in retirement an extra $29.70 per fortnight, and couples an extra $22.40 per person.

The boost to retirement incomes is a result of indexation changes, which occur twice per year in March and September.

The adjustments will raise the full pension, including both supplements, to $1,178.70 per fortnight for singles.

Couples will now receive $888.50 per partner, or $1,777 combined, per fortnight.

The extra funds will certainly come in handy after Australia’s peak retirement budgeting body revealed retirement costs have gone up.

The Association of Superannuation Funds of Australia (ASFA) runs the Retirement Standard, a budgeting tool for our golden years.

ASFA has just revised its annual retirement costs estimate.

What does retirement cost per year?

ASFA says a comfortable retirement now costs $75,319 for couples and $53,289 for singles, assuming debt-free home ownership.

A modest retirement lifestyle costs $49,992 annually for couples and $34,522 for singles who own their own homes.

For renters, retirement is much more expensive.

ASFA only recently began publishing a budgeting guide for the growing cohort of Australians who rent their homes in retirement.

The revised estimate for a modest retirement for renters is $66,269 annually for couples and $49,044 for singles.

From tomorrow, the age pension will be $46,202 per annum for couples and $30,646 per annum for singles.

As you can see, there’s a shortfall between the costs of retirement and what the pension covers.

So, retirees need some income from investments or work to make up the difference.

ASFA recommends couples aim for $690,000 in superannuation and singles $595,000 by age 67 to achieve a comfortable retirement.

ASFA says only $100,000 in super for both couples and singles is enough to fund a modest retirement.

There’s a big difference in the amount of superannuation required because people who can afford a comfortable retirement lifestyle tend to own assets or earn income that are above the pension thresholds. Therefore, they typically only qualify for a part-pension.

Pensioners on a modest lifestyle tend to have fewer assets or earn less, and therefore they tend to qualify for the full pension amount.

Australians become eligible for the pension when they reach their ‘retirement age‘.

If you were born on or after 1 January 1957, that’s 67 years of age.

The pension is subject to assets and income tests.

If you own or earn too much, you may only qualify for a part-pension, or no pension at all.

How much can you have in retirement assets and still get a pension from tomorrow?

The value of assets you can own in retirement while still qualifying for the pension will also lift tomorrow.

Single homeowners can own $321,500 in assets (unchanged) and non-homeowners can own $579,500 in assets (unchanged) and get the full pension.

To qualify for a part-pension, single homeowners cannot own more than $714,500 in assets outside their primary residence, and non-homeowners cannot own more than $972,500.

Couples who own their homes can have $481,500 in assets (unchanged) and non-homeowners can have $739,500 in assets (unchanged) and still get the full pension.

For a part-pension, couple homeowners cannot own more than $1,074,000 in assets outside their family home, and non-homeowners cannot own more than $1,332,000.

How much can you earn and still get the pension?

Singles can earn $218 per fortnight (unchanged) and couples $380 combined per fortnight (unchanged) and qualify for the full pension.

For a part-pension, the new cut-off point for singles will be $2,575.40 per fortnight, and for couples, it will be $3,934 per fortnight.