The Association of Superannuation Funds of Australia has called on the Federal Government to set a clear retirement income target and to act on it.
Commenting on the results of the Westpac-ASFA Retirement Living Standard survey, ASFA CEO Philippa Smith says the research has identified for the first time exactly how much it costs for Australians to have a comfortable lifestyle in retirement and this is something which should be directly addressed by the Government.
The research provides detailed budgets of what singles and couples will need to spend to have either a modest lifestyle in retirement or a more comfortable retirement style.
The research defines “modest” as being better than the Age Pension, but still only able to provide for basic activities, while “comfortable” is described as enabling an older healthy retiree to have a broader range of leisure activities and a good standard of living.
And the bottom line of the research is that to enjoy a “modest” lifestyle retirees will need annual income of $23,550 each year and singles $16,930, while to achieve a “comfortable” lifestyle a couple will need an annual income of $43,350 and a single person will need $32,800.
According to the research, the items allowed for in the comfortable budget include:
n eating out from time to time;
n better quality clothes from department stores instead of discount chains;
n entertaining at home fortnightly (with a family roast);
n private health insurance at the top rate;
n a better quality (but still mid-range second hand) car;
n a few alcoholic drinks, including wine, per week;
n being able to replace worn-out white goods with reasonable quality ones.
n some kitchen or bathroom renovations, or alternatively house modifications to accommodate a mild disability.
Smith says the extra expenditure allowed in the shift from “modest” to “comfortable” adds a lot to enjoyment of retirement, in particular, personal comfort, better health care and an ability to more fully participate in modern Australian Society.
She says the budgets were drawn up by first examining what Australians spend their money on, then precisely costing each the items.
