Retired Australian couples hoping to live a comfortable life need to be prepared to spend $62,562 a year as the cost of living increases, according to new figures.
In comparison, singles will need to have $44,224 set aside a year, the latest cost of retirement figures from the Association of Super Funds of Australia (ASFA) has revealed.
Cost per year.
That reflects a 0.9 per cent increase between the December 2020 and September 2020 quarters, ASFA said, with rising health insurance premiums one of the factors contributing to the change.
Additionally, the number of retirees with health insurance has increased from 2.0 million in 2018 to 2.2 million in 2020.
The increased retirement budgets were also due to more retirees choosing to spend money to alleviate the lockdown boredom.
“COVID-19 impacted on just about every aspect of Australia's financial and economic conditions. Now, price increases are returning to a more standard pattern following a few quarters of suspension or delay in key costs, such as health insurance premiums,” said ASFA deputy CEO, Glen McCrea.
“As a greater number of people ventured out of their homes in search of a meal out or a domestic holiday, we saw price rises in those areas, which is not altogether favourable for retirees on a budget.”
What trends are we seeing in retirement spending?
ASFA noted a 6.3 per cent increase in the cost of domestic holidays on retirees’ budgets, due largely to the summer break and the opening of state borders.
Retirees also spent 1.1 per cent more on takeaway food and restaurant meals, also due to restaurants reopening more broadly across Australia.
Money retirees had set aside for international travel has also been partially funnelled into home improvements, new furniture and appliances.
Retirees’ budgets were also impacted by changing meat, fruit and vegetable prices, with beef and veal increasing 3.0 per cent. However, there was a 6.0 per cent fall in the price of vegetables as drought conditions eased, meaning the cost of food rose by a cumulative 2.3 per cent.
The wind-down of panic buying also meant retirees had access to regular discount cycles and sales, meaning they didn’t need to spend as much on cleaning products and toilet paper.
At the same time, they spent 1.8 per cent more on cars amid public transport health concerns.
Here’s what the new retirement budgets look like
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