With expenditure rising across the board, largely due to external factors, Australia’s superannuation system is assisting retirees to stay afloat in comparison with their global peers.
The average Australian couple retiring at age 67 would require $640,000 in super balances to achieve a comfortable retirement while a single person would require $545,000.
According to the Association of Superannuation Funds of Australia (ASFA), Australian retirees on average had larger private savings balance than in most other countries.
The ASFA Retirement Standard September Quarter 2022 figures indicated the amounts to fund a comfortable retirement had risen 6.6% for a couple and 6.7% for a single person, below the inflation rate of 7.3%.
Couples aged around 65 living a comfortable retirement would now need to spend $68,014 per year while singles would need to spend $48,266.
Meanwhile, when it came to the older demographic, couples aged around 85 living a comfortable retirement would now need to spend $62,237 per year while singles would need to spend $44,851.
“We can take some solace from the fact that the investment we’ve made in superannuation over the last three decades is acting as a buffer in the face of these strong headwinds,” said ASFA deputy chief executive, Glen McCrea.
“Governments in Europe and the UK are actively considering raising the retirement age or slashing the amount of pension retirees receive as they struggle to deal with the global economic challenges they are facing.
“In contrast, the Age Pension remains affordable for the Government in Australia where, in aggregate, retirees on average have larger private retirement savings balances than in most countries in the world. This helps cover costs during tougher times, providing a brighter outlook for Australian retirees than is the case for their international counterparts.”
Cost of living pressures continue to mount, recording strong increases across all food and non-food grocery products in the September quarter. In the year to date, the price of fruits and vegetables saw a 16.2% rise while the price of dairy products increased 12.1%.
Other price rises included coffee (10.7%), fuel (18%), and oils and fats (19.5). The price of take-out meals, too, rose 2.9%.
While the travel industry remains on the road to recovery, domestic travel and accommodation saw price rises of 10.8% over the year while international travel and accommodation increased by a considerable 25.3%.
