Age pension not enough for older retirees

While it is widely known that the expenses of retirees aged 70 are well above the full age pension, expenses for those aged over 90 still far exceed allowances from the Government, according to the latest study from the Association of Superannuation Funds of Australia (ASFA).

In a new report on the spending patterns of older retirees, ASFA found that costs for 90-year-old retirees were, in some instances, substantially less than those for retirees aged 70.

ASFA compared the new figures to its Retirement Standard to find that a couple leading a comfortable retirement will spend $54,562 at age 70 and $48,900 at age 90 – a difference of 11.6 per cent.

A single person living a comfortable lifestyle will also spend $39,852 at age 70 and $36,770 at age 90 – a difference of 8.4 per cent.

The differences were less noticeable for those living a modest lifestyle, with little difference between a 70 and 90-year-old couple, and only 4.6 per cent difference between a 70 and 90-year-old single.

The cost of transport and leisure were pointed to as the major contrasts between the two age groups, as relatively few retirees aged 90 drive motor vehicles or go on overseas holidays.

However, this is somewhat balanced out by the fact that those aged 90 have additional expenses in household services and healthcare.

ASFA said another implication to be drawn from its figures was that in planning for the future, retirees should not necessarily assume that it is necessary to maintain a constant level of expenditure over retirement.