The amount of money retirees need for a comfortable retirement rose again in the last quarter of 2023 to a record high, but there are indications the upward trend in living expenses may be slowing, according to the Association of Superannuation Funds of Australia (ASFA).
Releasing its Retirement Standard figures for the December quarter 2023, ASFA stated a couple aged around 65 living a comfortable retirement would need $72,148 a year, an increase of 0.59 per cent on the previous quarter, while singles living at the same standard would need $51,278 a year, up by 0.58 per cent.
While the figures contributed to a 3.5 per cent increase in living costs over the previous year, the quarterly increases for couples and single retirees are lower than the September quarter, which saw the Retirement Standard rise by 1.3 per cent for couples and 1.5 per cent for those living alone.
“Retiree budgets have been under substantial pressure for the past two years due to the high cost of essential goods and services,” ASFA chief executive Mary Delahunty noted.
“Fortunately, we are seeing price increases in the key categories that make up retiree budgets – home and content insurance, fruit and vegetables, fuel and electricity – begin to ease.”
Annual food inflation eased to 4.5 per cent in the December quarter, down from 4.8 per cent in the September quarter and a peak of 9.2 per cent in December 2022. Price rises have been lower across all food categories, while fruit and vegetable prices fell 0.2 per cent compared to 12 months ago.
Fuel and electricity price increases also appear to have slowed, with the price of unleaded petrol falling 0.2 per cent. Electricity prices rose 1.4 per cent in the December quarter 2023, compared to a rise of 4.2 per cent in the September quarter.
According to ASFA, the energy bill relief fund rebates, initiated in July 2023, have helped alleviate the surge in electricity costs for households. Since June 2023, electricity prices have gone up by 5.7 per cent. However, without factoring in the energy bill relief rebates, the increase would have been much higher at 17.6 per cent during this timeframe.
There was a substantial increase in the cost of insurance, with average prices rising 16.2 per cent in the 12 months to the December quarter 2023, which is the strongest annual rise since March 2001.