Higher electricity prices are mostly to blame for a slight increase in retirement costs, according to the Association of Superannuation Funds of Australia (ASFA) Retirement Standard in the June quarter.
The ASFA Retirement Standard estimated an increase of 1.1 per cent in retirement costs for all retirees over the year, almost equal to the growth of the All Groups Consumer Price Index of 1.2 per cent over the same period.
A couple looking to achieve a comfortable retirement would need to spend $55,213 a year, while those seeking a modest retirement lifestyle will need $31,760 a year, assuming they owned their own homes.
According to ASFA, the rise in retirement costs is mostly attributed to electricity prices which increased by a substantial 10.6 per cent over the year to 30 June 2012, but the rise in health costs – particularly health insurance – was of no help either.
Retirees, however, benefited from price falls or only modest increases across a range of important components of retirement budgets such as food and groceries.
"Along with generally owning their own home outright (so cost increases for housing are less important for retirees), they don't tend to spend much on education services," ASFA stated. "In contrast, food, health, transportation and recreation form a large part of retiree budgets."
ASFA noted it is not unusual for the effects of the various differences to largely cancel out over the long term.
