Cost of retirement holds steady
The cost of funding a moderate to comfortable retirement remains steady, with food, health, transportation and recreation making up the largest part of the post-retirement budget, according to new research from the Association of Superannuation Funds of Australia (ASFA).
While the December quarter 2011 figures from the ASFA Retirement Standard were marginally down (0.1 per cent) on the September quarter results, the report determined that a couple seeking a 'comfortable' retirement will need to spend $55,249, while those seeking 'modest' retirement lifestyles will need to have around $31,675 in savings.
A modest lifestyle was described by ASFA as better than the lifestyle afforded by the age pension, but still only allowing for fairly basic activities.
In order to support these expenditure requirements, ASFA stated that retired couples would require a lump sum of around $510,000, while single retirees would need $430,000.
Assuming that the retiree already owns their own home, a couple seeking a comfortable retirement will need to spend around $78.20 a week on housing, while couples seeking a modest lifestyle will need to spend $55.87 a week.
In contrast, a comfortably retired couple will allocate $191.86 a week to food, $120.18 a week to health, $140.02 a week to transport and around $304.83 to leisure activities.
On a positive note for retirees, between the September 2011 quarter and the December 2011 quarter the study found that there was a 1.5 per cent decrease in the amount retirees would need to spend on food.
While transport costs remained relatively unchanged between the September and December quarters, electricity costs and leisure goods and services rose by 0.6 per cent and 0.8 per cent, respectively.
The report also recorded a 1.2 per cent fall in the price of health services as a result of falling pharmaceutical prices, particularly as more Australians take advantage of the Pharmaceutical Benefits Scheme safety net.
Despite this, ASFA noted that over the long-term, health services tend to experience higher increases in prices than other categories of consumer goods and services.
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