Employed Australians are being encouraged to begin saving early for financial security during retirement, with a superannuation industry body revealing the living costs for retirees has jumped once again.
The Association of Superannuation Funds of Australia (ASFA) has released its Retirement Standard June quarter 2021 report, with the figures indicating the cost of daily living necessities, including food, healthcare and petrol, has increased considerably.
The analysis revealed couples aged around 65 living comfortably in retirement need to spend $63,352 a year – a 2.3 per cent increase over the year to June 2021 – meanwhile singles will need to spend $44,818, which is a 2.6 per cent rise over the same time period.
ASFA chief executive Martin Fahy said the significant change in the cost to retirees’ lifestyle is connected to coronavirus pandemic restrictions.
“Price increases faced by retirees have begun to accelerate following a period when COVID-19 led suspensions or delays in key costs such as health insurance,” Fahy said.
“We’re seeing significant increases in the price of essentials, namely petrol (up 27.3 per cent), hospital and medical services (up 6.7 per cent) and even basic fruit and vegetables.”
Healthcare significantly increased in cost over the previous year by 4.8 per cent, with private health insurance premiums also rising by 2.7 per cent due to the annual increase on 1 April.
Automotive fuel costs rose by 6.5 per cent, surpassing pre-pandemic March quarter 2020 prices, and motor vehicle prices rose by 2.2 per cent.
Fahy noted minor price rise across various sectors may seem insignificant, but can impact on the average retiree’s budget.
“Small price rises across the board can add up to have a big impact on the average retiree budget. The cost of retirement is now 2 to 3 per cent more expensive, on average, than a year ago,” he said.
“It’s so important that future retirees are able to build sufficient savings over their working lives to ensure they can face retirement with financial confidence. Moving Australia to the 12 per cent superannuation guarantee setting is an excellent step towards achieving this goal.”