The organisation has tracked the cost of living for more than ten years to provide Australians with a set of ‘retirement standards’ budgets, outlining the expected annual costs required for couples and individuals in retirement to live either modestly or comfortably.
Since the first release of these retirement standards in June 2006, the annual cost for a single person to retire modestly has increased 33 per cent, while the amount required for a comfortable retirement increased 23 per cent, the Association of Superannuation Funds of Australia (ASFA) said.
For a couple, the cost of a modest retirement has grown 36 per cent and the cost of a comfortable retirement climbed 16 per cent.
ASFA chief executive Martin Fahy said this increase was driven by hikes in power, health care and food costs.
“Over the period, electricity costs increased by 124 per cent, health costs by 60 per cent, property rates and charges by 83 per cent and food costs by 24 per cent,” Mr Fahy said.
“Price changes for less essential items tended to be lower and in some cases prices fell.
“The price of clothing fell by a total of 3 per cent over the period with an 8 per cent fall in the cost of communications, including telephone and mobile phone charges.”
Mr Fahy noted that the age pension, which is adjusted by “what is the greater of the increase in average wages or the CPI”, has also increased in that time, but is insufficient on its own for a retiree to enjoy even a modest retirement by ASFA’s standards.
ASFA’s figures reveal couples aged around 65 will need to spend $59,971 a year and singles $43,665 a year for a comfortable retirement.