Retirees are continuing to struggle with inflation and rising living costs, with a record level of funds needed to maintain a comfortable retirement, however, there are signs inflation may be starting to moderate, according to the Association of Superannuation Funds of Australia (ASFA).
In its most recent Retirement Standard figures for the March quarter, released today, ASFA stated the cost of a comfortable retirement for a couple rose 0.7 per cent to hit a new high of $72,663 a year, an annual increase of 3 per cent from the March quarter 2023.
Retirees living alone require $51,630 a year for a comfortable lifestyle, marking a 0.68 per cent rise from the December quarter 2023 and bringing the annual increase to 3.25 per cent.
“Retirees continue to feel considerable cost-of-living pressure on their household budgets. Fortunately, in the past three months we’ve seen the pace of price rises ease somewhat in key spending categories, namely food and fuel,” ASFA chief executive Mary Delahunty noted.
“Ongoing inflationary pressure reinforces the need for Australia’s strong superannuation system, which is designed to ensure retirees can achieve a dignified lifestyle in their post-work years and adequate retirement income to withstand these more challenging times.”
The data showed hospital and medical service costs rose by 2.1 per cent, nearly double the 1.2 per cent increase seen in the previous quarter.
Moreover, premiums for house, home contents and motor vehicle insurance continue to rise due to factors such as higher reinsurance, increased natural disaster expenses and claims costs. These premiums jumped by 3.7 per cent quarterly and 16.7 per cent annually, marking the largest annual increase in insurance prices since 2001.
Despite the significant rises in medical and insurance costs, there are indications of a slowdown in household spending in certain areas.
While the amount retirees are expected to spend on food rose steadily by 3.8 per cent, it is lower than the increase of 4.5 per cent in the previous quarter. Bread and cereal products experienced the highest annual increase at 7.3 per cent, followed by dairy products at 4.1 per cent, while the costs of meat and seafood slightly decreased by 0.7 per cent.
Average fuel prices declined by 1 per cent in the March quarter, with the average price of unleaded petrol for the three months standing at $1.94 a litre.