Retirement costs have continued to rise for the December 2012 quarter, according to the recent Association of Superannuation Funds of Australia (ASFA) Retirement Standard.
The report showed that a couple looking to achieve a ‘comfortable’ retirement will need to spend $56,339 per year, whilst couples seeking a ‘modest’ retirement lifestyle will need $31,555 per year. These figures are up by two per cent and 2.8 per cent quarter-on-quarter respectively.
In comparison, the increase in the All Groups Consumer Price Index (CPI) was 2.2 per cent over the year.
The costs of retirement did not increase significantly between the September and December 2012 quarters, up 0.3 per cent at the comfortable level and 0.1 per cent at the modest level. This was similar to the 0.2 per cent increase in the All Groups CPI.
“There were several contributors to the increase in costs over the quarter. The most significant price rises were for domestic holiday travel and accommodation (6.2 per cent), and automotive fuel (2.6 per cent). These fed into the increase in the retirement budgets, particularly at the comfortable level,” ASFA said in the report.
Increased accommodation prices during the Christmas and summer school holiday period were cited for the increase in these areas.
The most significant price falls were for vegetables (-5.7 per cent) owing to favourable weather conditions, audio, visual and computing equipment (-4.3 per cent) and pharmaceutical products (-3.5 per cent).
The fall was partially offset by rises in poultry (6.0 per cent), fruit (1.7 per cent) and cakes and biscuits (1.7 per cent).
ASFA also noted a fall in health costs recorded in the quarter. The main contributor was pharmaceutical products (-3.5 per cent), which fell mainly as a result of a greater proportion of consumers exceeding the Pharmaceutical Benefits Scheme safety net compared to the September quarter 2012.
“Over the long term, the underlying trend has been for significant increases in health costs, which has implications for many retirees,” the association said.
“The reason that the increase in the costs of retirement at the modest and comfortable levels differed from the increase in the All Groups CPI is that retiree households, on average, have somewhat different spending patterns to the rest of the population.”
