Retirees feel the cost of living pinch
August 18, 2022
The cost of a comfortable retirement has gone up according to the ASFA Retirement Standard March quarter 2022 figures.
The findings show couples aged around 65 need to spend $65,445 per year, up by 1.0% and singles $46,494, up by 1.2% on the previous quarter, to have a comfortable retirement*.
The financial pain is largely being caused by the increase in cost of necessities such as food, fuel, power and health services. Health costs will generally increase for retirees as they get older, with many still having to pay for out-of-pocket expenses for everyday services like dental and optical and gap payments in hospitals.
Retirees aged around 85 have also felt the pinch to their cost of living budgets for a comfortable retirement, up by 1.2% from the previous quarter. While they were less affected directly by rising petrol prices, the knock-on effect has seen an increase in the cost of many goods and services still needing to be purchased by older retirees.
When speaking about the rising costs for retirees, ASFA Deputy CEO, Glen McCrea said, ‘While this is marginally smaller than the annual inflation impact of 5.1 per cent for wage earners, the reality is that retirees are doing it tough too.’
‘The rising cost of living in retirement highlights the need for compulsory superannuation to increase to 12 per cent of wages by 2025,’ he said*.
The following ASFA tables for the March quarter 2022 show the budgets of various households and living standards for retirees.
Retiree budgets – aged around 65*
| Household type | Single Modest | Couple Modest | Single Comfortable | Couple Comfortable |
| Housing – ongoing only | $105.95 | $119.01 | $124.48 | $129.91 |
| Energy | $33.96 | $45.61 | $43.02 | $53.35 |
| Food | $98.78 | $183.13 | $127.71 | $221.97 |
| Clothing | $20.19 | $38.36 | $26.97 | $50.22 |
| Household goods and services | $35.77 | $41.97 | $79.28 | $97.68 |
| Health | $52.96 | $102.27 | $108.25 | $202.65 |
| Transport | $102.00 | $108.64 | $166.67 | $180.52 |
| Leisure | $100.35 | $157.55 | $192.15 | $288.60 |
| Communications | $17.71 | $19.95 | $22.15 | $28.83 |
| Total per week | $567.66 | $816.49 | $890.68 | $1,253.73 |
| Total per year | $29,632 | $42,621 | $46,494 | $65,445 |
Retiree budgets – aged around 85*
| Household type | Single Modest | Couple Modest | Single Comfortable | Couple Comfortable |
| Housing – ongoing only | $105.95 | $119.01 | $124.48 | $129.91 |
| Energy | $33.96 | $45.61 | $43.02 | $53.35 |
| Food | $98.78 | $183.13 | $127.71 | $221.97 |
| Clothing | $20.19 | $38.36 | $26.97 | $50.22 |
| Household goods and services | $53.68 | $76.96 | $158.46 | $189.88 |
| Health | $92.10 | $128.53 | $152.19 | $239.76 |
| Transport | $40.89 | $51.10 | $46.00 | $56.21 |
| Leisure | $65.13 | $93.44 | $135.01 | $189.42 |
| Communications | $17.71 | $19.95 | $22.15 | $28.83 |
| Total per week | $528.39 | $756.10 | $835.98 | $1,159.55 |
| Total per year | $27,582 | $39,468 | $43,638 | $60,528 |
Make sure your super is set up for the retirement you deserve.
Whether you want to review your current situation or take up strategies that could boost your super balance, now might be a good time to speak with TelstraSuper Financial Planning. To book an appointment call 1300 033 166 or request a call back.
*https://www.superannuation.asn.au/media/media-releases/2022/media-release-2-june-2022