According to new figures, Australians are living on modest budgets, and those who are living close to or at pension age are suffering the greatest costs.
ASFA has released the June quarter Retirement Standard (RS) update with new budgets for modest and comfortable living. The comfortable standard budget will afford a more dignified existence for retirees, and the modest budget is at near-pension level subsistence.
The ASFA Retirement Standard June quarter figures show that couples aged around 65 years and living a comfortable retirement need to spend $60,270 per year, and singles need to spend $43,695. This figure is up 0.2 per cent on the previous quarter.
At the modest level, couples need to spend $34,911 annually, and singles need to spend $24,270. This figure is up 0.1 per cent on the previous quarter.
The total budgets for retirees aged 85 and over has increased around 0.5 per cent compared to the previous quarter at the modest and comfortable level.
The annual increase in the cost of living at the modest level was higher in each case than at the comfortable level, which reflects the greater relative importance of health care, electricity, and council and water rates in the modest budget.
The annual increase for the comfortable level was 1.5 per cent and 2.1 per cent for modest level. This compares to the 1.9 per cent for the general Consumer Price Index.
ASFA chief executive Dr Martin Fahy said, ‘the cost of retirement over the most recent quarter only increases by a relatively small amount and that is welcome news, but many retirees are still finding it difficult to achieve a comfortable standard of living in retirement. Far too many people are living without enough super, especially women. The pension is not enough.’
Fahy continued, ‘in particular, retirees with healthcare needs are facing significant increases in costs. The costs of electricity and gas and of council and water rates are a serious concern for many.’
Australian retirees who are living at the very basic level are struggling to meet the costs of living and need help. Financial literacy and support are part of the solution and super fund across the country can help support their members sort out their retirement living plan. ASFA says that consumers who need help should get in contact with their fund.
ASFA has examined the living costs for retirees in capital cities. The cost increases were highest in Sydney, Adelaide, Canberra and Hobart. The lowest overall price increases were in Darwin, Brisbane and Perth.
Sydney had a 3.8 per cent increase in food costs, a 5.1 per cent increase in health costs, and a 12.5 per cent increase in electricity costs. Darwin had no increase in the price of electricity, and only small increases and decreases in most expenditure categories.