Australian couples and singles aged around 65 will need to increase their spending by up 1.5% and 1.6% respectively on the previous quarter to retain their comfortable retirement standards, according to Association of Superannuation Funds of Australia (ASFA) figures.
Given the current landscape, retirees were expected to continue to see their budgets impacted by non-discretionary inflation and unavoidable price increases on goods and services such as food, petrol and health costs.
According to ASFA, the annual percentage increases in the comfortable budgets were the largest since 2010 as in 2021, prices were up by around 3.5% for the comfortable couple budget and by 3.9% for the comfortable single budget.
In addition, the percentage increases in the budgets for those aged around 65 were higher than the increase in the December quarter All Groups CPI of 1.3% and the price increases for retirees were outstripping those for employees.
At the same time, retirement budgets for those aged around 85 were up by 0.8% from the previous quarter reflecting the different expenditure pattern in such budgets and the older retiree budgets were not directly affected by the increase in petrol prices, which were significant in the December quarter, as there was no allowance for car ownership for this age group.
ASFA deputy chief executive, Glen McCrea, said it was crucial for the Government to address the repair of people’s retirement budgets as the economy was starting to see the other side of the COVID-19 crisis.
“It’s so important that future retirees are able to build sufficient savings over their working lives to ensure they can face retirement with financial confidence,” McCrea said.
Separately, the balances of women and low-income earners were among those hardest hit by the acceleration of price increases, COVID-19 and policies such as the early release of super.
Source: ASFA
