The cost of living for retirees rose by less than 1 per cent in the December quarter as some expenses declined and stronger investment returns provided a boost, according to the Association of Superannuation Funds of Australia (ASFA).
The latest Retirement Standard released by the superannuation industry peak body showed the cost of a comfortable retirement rose by 0.1 per cent in the December quarter, meaning couples aged around 65 now need $73,077 a year to achieve a comfortable retirement and singles require $51,805.
The increase over the September quarter was around $40 for a couple, but was a decrease of about $10 for singles, while the marginal rise had no effect on budgets for a modest level of retirement.
ASFA noted while costs were higher for domestic holiday travel and accommodation, as well as for home and vehicle insurance, a decline in electricity prices in the December quarter of close to 10 per cent was a key contributor to retirees being better off, as were stronger superannuation returns.
“Retirees have made up some of the shortfall through strong investment returns gained last year,” it said.
“Balanced superannuation fund options showed a typical return of at least 10.5 per cent for calendar 2024, with some funds recording nearly 12 per cent, while returns for accounts in the retirement phase were even higher.”
As such, the cost of a comfortable lifestyle rose by around 1.3 per cent over the past 12 months, which was around half the Consumer Price Index increase of 2.4 per cent over the same period.
ASFA chief executive Mary Delahunty said the easing in price increases for goods and services was welcome, but the recent bout of high inflation was still a factor when considering retirees’ ability to fund a comfortable retirement.
“While recent strong investment returns are helping retirees and those planning for retirement in achieving their desired retirement lifestyles, the most recent Retirement Standard budgets reinforce the fact that Australians need both compulsory superannuation and voluntary contributions which are preserved until retirement to have the sort of retirement they need and deserve,” Delahunty said.
