Slight increase in retirement costs
There has been a slight increase in retirement costs for retirees, mostly due to the rise in electricity prices, according to the Association of Superannuation Funds of Australia (ASFA) Retirement Standard in the June quarter.
A couple looking to achieve a comfortable retirement would need to spend $55,213 a year, while those seeking a modest retirement lifestyle will need $31,760 a year, assuming they own their own homes.
This represents an increase of 1.1 per cent over the year for both levels - almost equal to the growth of the All Groups Consumer Price Index of 1.2 per cent over the year.
According to ASFA, the rise in retirement costs is mostly attributed to the rise in electricity prices, which increased by a substantial 10.6 per cent over the year to 30 June 2012.
Another contributor is the rise in health costs, particularly health insurance, ASFA said.
Retirees, however, benefited from price falls or only modest increases across a range of important components of retirement budgets such as food and groceries.
"Along with generally owning their own home outright (so cost increases for housing are less important for retirees), they don't tend to spend much on education services," ASFA stated. "In contrast, food, health, transportation and recreation form a large part of retiree budgets."
ASFA noted it is not unusual for the effects of the various differences to largely cancel out over the long-term.
Recommended for you
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
