As people age, the question about what the cost of living will be if you retire crops up a lot more often.
The Association of Superannuation Funds of Australia (ASFA) has claimed this week that the cost of retirement is rising faster than it has in 11 years.
Every quarter, ASFA releases an approximate budget, outlining rough costs for each household and living costs retirees, aged about 65 years, and about 85 years, will face.
The ASFA Retirement Standard September quarter 2021 figures show that to live a comfortable retirement, couples aged around 65 will spend $63,799 per year and singles $45,239, up by 0.9 per cent and 1.0 per cent respectively on the previous quarter.
“Australian retirees are now facing significant pressure on their budgets, given a range of unavoidable price hikes including petrol and council rates,” said ASFA Deputy CEO, Glen McCrea.
So, what items have increased the most in price?
- Fuel prices reached a record level in the September 2021 quarter, leaping 7.1 per cent due to higher global oil prices amid economic recovery and supply disruptions.
- Property rates rose 3.3 per cent, which is the largest rise since 2016. Many councils increased rates after implementing smaller rises, rebates or rate freezes last year.
- Restaurant meals (+1.6 per cent) and takeaway and fast foods (+1.3 per cent) both rose primarily due to reduced uptake of the NSW ‘Dine & Discover’ and City of Melbourne ‘Melbourne Money’ voucher schemes compared to the June 2021 quarter. These vouchers reduced the out-of-pocket costs for consumers, hence fewer vouchers being redeemed resulted in a price rise in the September quarter.
- Furniture (+3.8 per cent) prices rose due to supply shortages and elevated demand from households.
- Over the past 12 months, there was a strong increase in the costs of domestic holiday travel and accommodation (+3.8 per cent).
ASFA naturally wants future retirees to be able to build their retirement savings through increased superannuation, namely moving to the 12 per cent Superannuation Guarantee (SG) setting.
But the figures above are also a good reminder to plan ahead for retirement – and potential financial challenges.
If you are considering moving to a retirement village, land lease community or an apartment to free up capital – and have access to a ready community – it’s never too early to start looking.
For retirement living options, visit villages.com.au
