Retirement costs rise in September

Couples and singles aged around 65 living a comfortable retirement need to spend 0.8 per cent more in the September quarter, according to the Association of Superannuation Funds of Australia (ASFA).

This was on the back of price increases for fruit and vegetables, electricity, property rates and charges, as couples needed to spend $59,619 per year, and singles $43,372.

ASFA said retirees aged 85 and over increased by 0.9 per cent, and over the 12 months to the September quarter, the budgets at a comfortable level rose by 1.2 per cent, compared to 1.3 per cent in overall consumer price index (CPI).

ASFA chief executive, Dr Martin Fahy said annual growth in the overall CPI remained low but retirees faced a number of cost increases in the September quarter.

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"The increase in cost of living in retirement highlights the need for saving an adequate amount for retirement," Fahy said.

"In order to achieve a comfortable standard of living in retirement, an individual requires a minimum of around $545,000 and a couple around $640,000.

ASFA said currently less than 20 per cent of single people aged more than 65 and 30 per cent of all couples were able to support a standard of living at or above the ASFA comfortable level.

Fahy said the percentages would lift to 50 per cent or more of retirees if the rate of compulsory contributions were raised to 12 per cent and individuals made voluntary contributions.