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Cost of retirement steadies
The good news for couples approaching retirement in Australia is that it is not becoming dramatically more expensive.
That is the bottom line of the latestWestpac/Association ofSuperannuation Funds of Australia (ASFA) Retirement Standard survey, which found that the annual cost of a couple living comfortably in retirement fell marginally in the December quarter to $47,824.
The fall was attributed to declines in the prices of petrol and pharmaceuticals.
Commenting on the survey outcome, ASFA research director said the main factor behind the small increase in the overall cost of living for retirees was the large fall in the price of petrol, which led to a 3.8 per cent decline in the cost of transportation compared with the previous quarter.
“Health costs also fell as a result of a fall in the cost of pharmaceuticals,” he said. “There was only a very modest increase in the price of food overall, largely due to an unbending of the price of bananas as crops recovered from the effect of the cyclone last year.”
Westpac head of offer and design said having gained an understanding of the annual cost of living in retirement the next step was to make a realistic assessment of how much would be needed to generate an income over 20 or 30 years.
“How much will I need to fund my retirement is one of the most common questions asked of financial planners,” she said. “And the answer is often widely different depending on the type of lifestyle the individual has and wants, their assets and the age at which they hope to retire,” she said.
AUTHOR
Mike Taylor
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