Retiree cost of living expenses and spending have dropped as a result of the lifestyle changes brought on by the COVID-19 pandemic, the Association of Superannuation Funds of Australia (ASFA) has found.
ASFA’s Retirement Standard for the June quarter 2020 revealed retirees experienced a decrease in their living costs compared to the previous quarter, with the cost of living a comfortable retirement for couples aged around 65 dropping by 0.8 per cent to $61,909 a year.
The cost of living a comfortable retirement for singles aged around 65 fell by 1.1 per cent over the June quarter to $43,687.
“Despite the impact of COVID-19 on Australia’s financial and economic conditions, the cost of living came down for retirees in the June quarter due to a drop in everyday expenses, including petrol, electricity, gas and water,” ASFA chief executive Martin Fahy said.
“Dramatic changes in our lifestyles have had a big impact on demand and prices right across the economy. With fewer of us commuting by road, the price of petrol has plummeted around 20 per cent in the June quarter. At the same time, with so many Australians suspending travel plans and staying at home, the cost of household appliances, furniture and gardening equipment went up.”
While travel restrictions and reduced spending on entertainment and dining-out had contributed to budget savings in the short term for some retirees, ASFA pointed out many retirees were also likely to be experiencing lower investment returns due to the economic impact of the COVID-19 pandemic.
“Having sufficient superannuation savings to support the retirement lifestyle that Australians want and deserve is an imperative,” Fahy added.
Last month, Challenger retirement income chair Jeremy Cooper said SMSF members who are also retirees were facing a new dynamic as to how they generate retirement income due to the impact the coronavirus pandemic has had on their capital invested in equities and property markets.
