Retirement costs rising faster for modest incomes
The annual increase in living costs rose higher in the past year for those at a moderate retirement level than it did for those at the comfortable level, according to the Association of Superannuation Funds of Australia.
The ASFA Retirement Standard June quarter figures show couples aged around 65 living a comfortable retirement need to spend $60,063 per year and singles $43,695, which was a 0.2 per cent increase from the previous quarter.
At the modest level, singles needed to spend $24,270 and couples $34,911, representing a 0.1 per cent from the previous quarter.
The ASFA data also indicated that total budgets for retirees aged 85 and over increased by around 0.5 per cent compared to the previous quarter at both the comfortable and modest levels.
According to ASFA, the annual increase in living costs at the modest level was in each case higher than at the comfortable level, “reflecting the greater relative importance of electricity, healthcare and council and water rates in the modest budgets”.
The annual increase was 1.5 per cent for comfortable and 2.1 per cent for modest, ASFA said. The figure for the modest level was above the general consumer price index (CPI) rate of 1.9 per cent.
ASFA chief executive Dr Martin Fahy said Australian retirees living at the very basic level are finding it tough to meet the costs of living and need help.
“We need people to be retirement ready by saving for the sort of life they want to live and getting their super sorted. The magic of compound interest and tax savings in super can help lift living experiences in later life,” said Mr Fahy.