The Association of Superannuation Funds of Australia (ASFA) has developed a new retirement standard for Australians aged 90-95 to give a clearer picture of required expenditure for this age group.
The existing ASFA retirement standard is focused on the spending requirements for those aged around 70 who are in relatively good health for their age and reside in their owner-occupied home.
ASFA chief executive Pauline Vamos said the ASFA Retirement Standard for Older Retirees will provide the government with a better indication of the spending magnitude and behaviour of older retirees.
“This will allow them to better analyse the impact that policy changes or price fluctuations in particular areas will have on this cohort of people and make better decisions accordingly," she said.
Ms Vamos said as retirees age their spending requirements change as they are unable to engage in the same types of activities but often require increased care and support which has different cost implications.
The ASFA Retirement Standard for Older Retirees found expenditure for 90-year-olds was actually less than for those aged 70.
For a modest lifestyle, expenditure requirements for 90-year-olds are $22,670 for singles and $33,744 for couples.
For 70-year-olds expenditure for a modest lifestyle is $23,489 for singles and $33,784 for couples.
The difference in expenditure between 70-year-olds and 90-year-olds was greater in the comfortable lifestyle category, with expenditure for 90-year-olds around 10 per cent lower in aggregate than those aged 70.
ASFA said the new standard found that older retirees spend less in aggregate than younger retirees due to a decrease in holidays and other leisure activities outside the home, most likely reflecting their reduced capacity for activity.
“However, they tend to spend more on assistance in the home, including for cleaning services and meals, as well as contributions toward home and community care services,” said Mr Vamos.
“They also tend to have increased out-of-pocket expenses for major medical procedures and ongoing chemist and other medical expenses.”
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
- 21 Aug 2016Risks flagged with real estate appraisal valuesBy Miranda Brownlee
- 21 Aug 2016Lawyer challenges ATO view on two fund strategiesBy Miranda Brownlee
- 18 Aug 2017ATO locks in details, addresses panic on real-time reportingBy Katarina Taurian
- 18 Aug 2017Data feeds unreliable for new reporting, says mid-tierBy Miranda Brownlee
- 18 Aug 2017Tax component confusion spurs potential tax liabilitiesBy Miranda Brownlee
- 18 Aug 2017Contributions triple in June quarter, survey showsBy Staff Reporter
- view all
- ATO locks in details, addresses panic on real-time reporting
The tax office has addressed several points of confusion with the new events-based reporting regime, locked in key deadlines, and outlined w...read more
- Data feeds unreliable for new reporting, says mid-tier
With an estimated 20 per cent of SMSFs still encountering errors from data feeds, one mid-tier firm believes the ATO should allow SMSF pract...read more
- view all