Retiree cost of living drops in March

The cost of living for retirees dropped slightly in the March quarter thanks to a fall in petrol prices, according to the Association of Superannuation Funds of Australia (ASFA) data.

The data found in March couples living a comfortable retirement, aged around 65, needed to spend $58,922 a year and singles $42,893, down 0.5 and 0.7 per cent respectively on the previous quarter.

Total retirement budgets for older retirees decreased by 0.2 per cent at a comfortable level, and 0.1 per cent at the modest level.

The most significant price drops leading to the decline in annual budgets were for automotive fuel (-10 per cent), fruit (-11.1 per cent), and holiday travel, particularly accommodation (down two per cent).

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These drops helped offset the rise in medical and hospital services (+1.6 per cent), and pharmaceutical products (+4.8 per cent).

ASFA chief executive, Pauline Vamos, said while the decline in the cost of living in retirement was welcome news, many people would still find it difficult to achieve a comfortable standard of living.

"ASFA advocates a goal of at least 50 per cent of retirees living at the comfortable standard by 2050," Vamos said.

"Unfortunately, saving an adequate amount for retirement is anticipated to get harder, with a low interest rate environment and an aging population, which will place more strain on governments as they seek to fund the increasing costs of health and aged care."

The data found insurance premiums continued to increase with a rise of 1.7 per cent in the quarter, and 5.2 per cent over the last 12 months.

"In the lead up to the end of the financial year, we advise consumers to start thinking about what additional contributions they can make to boost their superannuation," Vamos said.