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Retirees facing slightly increased costs: ASFA Retirement Standard June

Media Release 16 August 2013

16 August 2013

Retirees facing slightly increased costs: ASFA Retirement Standard June

New figures released today for the ASFA Retirement Standard show that the cost of living for retirees has increased slightly in the June quarter 2013, with a couple looking to achieve a comfortable retirement requiring expenditure of $56,406 a year, while those seeking a ‘modest’ retirement lifestyle need $32,656 a year.

These figures are up by a relatively modest 0.2 per cent and 0.1 per cent compared to the previous quarter, however the increases are less than the 0.4 per cent increase in the All Groups CPI (see Table 1 for budget breakdown).

Cheaper domestic holiday travel and accommodation (-4.0 per cent) and a decrease in petrol prices (-3.1 per cent) offset significant price rises for medical and hospital services (+3.4 per cent) and furniture (+4.8 per cent).

Food prices increased by a very modest 0.1 per cent. The main contributor to the rise was vegetable prices (+3.3 per cent), which rose mainly due to unfavourable growing conditions. The rise was partially offset by a fall in fruit prices (-3.4 per cent).

The main contributor to the rise in medical and hospital services were the increases in private health fund premiums effective from 1 April 2013.

ASFA CEO Ms Pauline Vamos says while over the longer term, the effects of these differences will even out, it’s important policy makers are aware of the different items and how they impact on the cost-of-living for retirees.

“Rising health costs can be a concern for retirees as they often form a large part of their budgets. Similarly, increases in the cost of food, energy and transportation also have a significant impact.

“It’s important policy makers take this into account when considering how to address cost-of-living issues for this group,” Ms Vamos concluded.

Table 1: Budgets for various households and living standards (June quarter 2013, national)

  Modest lifestyle – single Modest lifestyle – couple Comfortable lifestyle – single Comfortable lifestyle – couple
Housing – ongoing only $61.88 $59.40 $71.72 $83.14
Energy $41.14 $54.64 $41.75 $56.62
Food $74.31 $153.92 $106.15 $191.07
Clothing $17.96 $29.15 $38.87 $58.30
Household goods and services $26.21 $35.54 $73.73 $86.37
Health $38.80 $74.89 $76.98 $135.87
Transport $93.64 $96.29 $139.54 $142.20
Leisure $71.04 $105.83 $215.27 $295.00
Communications $9.49 $16.61 $26.08 $33.19
Total per week $434.46 $626.27 $790.08 $1,081.76
Total per year $22,654
$32,656 $41,197 $56,406

The figures in each case assume that the retiree(s) own their own home and relate to expenditure by the household. This can be greater than household income after income tax where there is a drawdown on capital over the period of retirement. Single calculations are based on female figures. All calculations are weekly, unless otherwise stated.

The ASFA Retirement Standard is an initiative by the Association of Superannuation Funds of Australia (ASFA) benchmarking the annual budget needed by Australians to fund either a comfortable or modest standard of living in the post-work years.

It is updated quarterly to reflect inflation and provides detailed budgets of what singles and couples would need to spend to support their chosen lifestyle.

Modest lifestyle in retirement

Better than the Age Pension, but still only able to afford fairly basic activities.

Comfortable retirement lifestyle

Enabling an older, healthy retiree to be involved in a broad range of leisure and recreational activities and to have a good standard of living through the purchase of such things as; household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel.

More information

Costs and summary figures can be accessed via the ASFA website.

For further information, please contact:

Lisa Chikarovski, Media Manager, 0451 949 300

About ASFA

ASFA is the peak policy, research and advocacy body for Australia’s superannuation industry. It is a not-for-profit, sector-neutral, and non-party political national organisation whose aim is to advance effective retirement outcomes for members of funds through research, advocacy and the development of policy and industry best practice.

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