The Association for Superannuation Funds of Australia (ASFA) has released a new retirement standard for people over 90 to account for the changing needs of older Australians.
The standard – which calculates the expenses of retirees aged between 90 and 95 – was developed to show how retirees’ expenditure changed as they grow older, AFSA chief executive Pauline Vamos said in a statement.
By contrast, the existing AFSA retirement standard is calculated on the basis of a 70-year-old in relatively good health residing in their own home, the statement showed.
The association found older retirees spend less in aggregate than their younger counterparts due to a decrease in holidays and other leisure activities, possibly as a result of decreased mobility.
However, this group tends to spend more on home assistance, care services and out-of-pocket medical expenses, according to Ms Vamos.
“This means policy changes in these areas can have a major impact on older retirees and individuals also need to budget for increased expenditure on these items,” she said.
Ms Vamos suggested the new standard was a necessary response to Australians' increased life expectancy and would assist the government and individuals to plan for extended retirement years.
“The ASFA Retirement Standard for Older Retirees will give governments a better picture of the spending magnitude and behaviour of older retirees,” she said.
“This will allow them to better analyse the impact that policy changes or price fluctuations in particular areas will have on this cohort of people and make better decisions accordingly.
"This information will also help individuals and their financial advisers with their own retirement planning, as they will be able to see how their spending will change in their later years and plan to save to accommodate this."