Costs for a couple living comfortably in retirement has increased as the cost of food, alcohol, tobacco, petrol and overseas holidays all rose in the September quarter 2008.
According to Westpac Retirement Standard figures, a couple looking to achieve a comfortable retirement needs to spend $50,561 a year, while those seeking a ‘modest’ retirement lifestyle need to spend $27,454 a year.
For those living comfortably, costs rose by 0.9 per cent from the June quarter 2007 and by a substantial 3.9 per cent from the September quarter the previous year.
These increases are similar to the respective 0.7 per cent and 3.8 per cent increases in the ‘all groups’ consumer price index, excluding housing and financial and insurance services, with retiree households generally owning their own home and not affected to any great extent by increases in housing prices or home mortgage interest rates.
Retiree households on average have somewhat different spending patterns to the rest of the population. They don’t tend to spend much on education services or rent but in contrast, food, health, transportation and recreation spending form a large part of their budgets.
Figures showed that between the June and September quarters 2008, retirees faced a 1.4 per cent increase in the cost of food and a 1.0 per cent increase in transportation costs, largely due to the 2.0 per cent increase in petrol prices.
There was also a 1.3 per cent increase in the cost of recreational goods and services, in part due to a 4.9 per cent increase in the cost of overseas holidays. There was, however, a 0.2 per cent decrease in the cost of health services.
Meanwhile, living the ‘good life’ in retirement incurred further price increases, with the cost of take away and restaurant food increasing by 6.9 per cent and 4.5 per cent respectively.
Basic food costs also rose strongly, with the price of milk and bread increasing by a massive 10.9 per cent.
