Cost of living figures continue to rise for retirees

The ASFA Retirement Standard June quarter 2022 figures indicate that couples aged around 65 living a comfortable retirement need to spend $66,725 per year and singles $47,383.

The figures were up by 2% and 1.9% respectively on the previous quarter.

Over the year to June 2022 prices were up by around 6.2% for the comfortable couple budget and by 6.7% for the comfortable single budget.

The percentage increases in the budgets for those aged around 65 were slightly higher than the quarterly increase in the June quarter All Groups CPI of 1.8%, and the annual change of 6.1%.

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ASFA deputy chief executive, Glen McCrea, said: "Retiree households continue to face ever increasing health costs, with the annual increase in private health insurance applying for 1 April.

"While there is considerable subsidisation of health costs and benefits being paid from private health insurance, out of pocket expenses remain substantial for items such as dental treatment, optical expenses, and gap payments for procedures in hospitals.

"Private health insurance premiums rose on average by 2.7% from 1 April with some major insurers increasing premiums by more than 3%.

"However, other insurers have postponed premium increases until later in the year."

Retirement budgets for those aged around 85 were up by around 0.8% from the previous quarter. The older retiree budgets were not directly affected by the increase in petrol prices, which were significant in the June quarter, as there is no allowance for car ownership for this age group. The over 85 budgets also do not include any overseas travel.

However, while retirees are doing it tough at the moment, the good news is the superannuation system is delivering. This is a result of more retirees having received the benefits of compulsory superannuation over long periods and also the impact of the legislated phased increase in compulsory superannuation to 12% of wages by 2025.

Recently published Department of Social Services figures indicate that only around 40% of those currently aged between 66 and 70 receive the Age Pension indicating the success of compulsory superannuation in both boosting retirement incomes and containing the Age Pension bill for the government.

"Despite the challenges of recent years, superannuation continues to achieve its objective of materially lifting the standard of living of older Australians and allowing more retirees to achieve the dignity they deserve in retirement," said McCrea.