Costs crimping comfortable retirement
Increasing costs are making maintaining a comfortable retirement more difficult, according to the latest data from the Association of Superannuation funds of Australia (ASFA).
The latest ASFA retirement standard found that couples seeking a modest retirement experienced increasing costs in the March quarter, whilst those seeking a comfortable retirement found their costs decreased.
Energy and health costs are pushing up retiree's expenditure, but couples seeking a comfortable retirement were rewarded by declining costs for overseas travel and audio, visual and computing equipment.
However, with a decrease of less than 0.1 per cent between the December and March quarters in aggregate terms, this equated to $1 extra per week and an outlay of $56,317 a year per couple per annum to achieve a comfortable lifestyle.
Decreasing costs stemmed from a fall in the cost of leisure goods and services as well as the strong exchange rate, which brought down the cost of overseas holidays and items such as computers and televisions.
The cost of leisure foods and services fell by 0.8 per cent between December and March, with overseas travel falling by 5.2 per cent. Audio, visual and computing equipment fell by 4.7 per cent.
Conversely, couples seeking a modest retirement have less leisure items in their budgets and needed to spend $32,603 per annum, a slight increase on last quarter's results, ASFA said.
A huge increase in the price of electricity over the year may be at fault. The cost of electricity continued to rise, increasing 2.4 per cent over the quarter and 14.4 per cent in the 12 months to March.
The cost of health services also continued to edge up with a 3 per cent increase this quarter, mainly due to a 7.6 per cent jump in the cost of pharmaceutical prices as fewer individuals benefit from the Pharmaceutical Benefits Scheme safety net. Over the year health costs increased 6.1 per cent.
The cost of food fell 0.8 per cent over the quarter due to pressure on the cost of fruit and vegetables, but it increased 1.6 per cent over the year to March.
A 0.5 per cent increase in transport costs and 1.2 per cent increase in fuel was partially offset by a decrease in the cost of motor vehicles.
Recommended for you
The financial services technology firm has officially launched its digital advice and education solution for superannuation funds and other industry players.
The ETF provider has flagged a number of developments as it formally enters the superannuation space through a major acquisition.
While all MySuper products successfully passed the latest performance test, trustee-directed products encountered difficulties.
Iress has appointed Insignia Financial’s former general manager of master trust and insurance products as its newest CEO of superannuation, who will take over from Paul Giles.
