Retirement Standard suffers less increase than CPI
Despite many everyday expenses rising at the end of last year, such as medical services, postage, and meat, the cost of living for retirees only rose slightly for the December quarter.
The Association of Superannuation Funds of Australia (ASFA) comfortable Retirement Standard for the quarter rose by 1.2 and 0.3 per cent for couples and singles respectively from the September quarter, hitting $60,977 and $43,317 for yearly needs.
For older retirees around 85 years old, there was an average cost of living increase of 0.3 per cent at the comfortable level and 0.2 per cent for the modest standard.
This was lower than the 0.5 per cent in the All groups CPI for the quarter. It’s worth noting that a substantial part of the All groups increase was because of a 9.4 per cent increase in the tobacco excise however, and ASFA doesn’t include tobacco in its retirement budget calculations.
While the rate of inflation was relatively low overall, many individual costs recorded strong increases, hence the overall slight increase. The major increasing costs were:
- Medical and hospital expenses rose by 4.2 per cent
- The cost of domestic holidays rose by 6.2 per cent
- Postal charges by 10.4 per cent
- Beer by 3.5 per cent
- Spirits by 2.5 per cent
- Eating out by 2.0 per cent
- Hairdressing by 3.2 per cent
- Gas and other household fuels by 3.2 per cent
- Automotive fuel by 6.7 per cent; and
- Urban transport fares by 2.5 per cent.
ASFA warned that food had also increased, with that trend set to continue as the drought in New South Wales keeps up its impact on supply and prices. The cost of fruit jumped five per cent for the quarter, largely due to seasonal rises in popular options, while the drought saw meat and seafood increase 1.6 per cent, with the cost of lamb and goat growing most at 6.8 per cent.
Some decreasing costs offset price increases for the quarter though, with automotive fuel dropping 2.5 per cent, audio-visual and computing equipment 3.3 per cent, wine 1.9 per cent, and telco equipment and services 1.5 per cent.
AUTHOR
Hannah Wootton
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