Good news on living costs for retiring clients
A substantial fall in petrol prices has seen the cost of living decline for retirees in the March quarter this year, according to the Association of Superannuation Funds Australia (ASFA).
The ASFA Retirement Standard for the March quarter indicated the cost of a comfortable retirement for a couple aged around 65 is now $58,922 per year, a 0.5 per cent drop from the previous quarter.
The cost of living also fell for singles, with the March figures showing a comfortable retirement for a single aged around 65 is now $42,893 per year, down 0.7 per cent from the previous figure.
ASFA chief executive Pauline Vamos said the small decline in the cost of living is welcome news for retirees but many people still find it difficult to achieve a comfortable standard of living.
According to ASFA, in order to achieve a comfortable standard of living in retirement, an individual requires a minimum balance of around $545,000 and a couple around $645,000.
"Currently, less than 20 per cent of single people and 30 per cent of couples (aged over 65) are able to reach this standard of living," said Ms Vamos.
"Unfortunately, saving an adequate amount for retirement is anticipated to get harder, with a low interest rate environment and an ageing population, which will place more strain on governments as they seek to fund the increasing costs of health and aged care."
For the March quarter, the most significant price drops were automotive fuel, down 10 per cent, fruit, down 11 per cent, and holiday travel, down 2 per cent.
The cost of medical and hospital services on the other hand rose 1.6 per cent, along with pharmaceutical products, which increased 4.8 per cent.
Ms Vamos said that in the lead-up to the end of the financial year, ASFA is advising consumers to start thinking about what additional contributions they can make to boost their superannuation.
"The earlier you engage with and contribute to your superannuation, the easier it will be to reach a comfortable lifestyle in your post-work years as you will get greater benefits from compound interest," she said.