Healthcare costs grew by more than 2.2 per cent over the June quarter, the Association of Superannuation Funds of Australia (ASFA) revealed on Thursday, with surging private health insurance premiums to blame.
“The cost of retirement over the most recent quarter only increased by a relatively small amount and that is welcome news, but many retirees will still find it difficult to achieve a comfortable standard of living in retirement," ASFA CEO Dr Martin Fahy, explained.
“Health care costs are a significant burden for many retiree households,” he continued, noting that private health insurance premiums have grown by an average 4 per cent in the last quarter.
Australians older than 65 make up 26 per cent of standard GP consultations in Australia, a recent Grattan report revealed. Most of these visits will lead to medication purchases and even with bulk billing, retirees can regularly face out-of-pocket expenses, ASFA noted.
Then there are specialist procedures, surgery and dental expenses.
These expenses mean retirees without sufficient savings can face long wait times or have to sacrifice other parts of their lifestyle.
How much do I need?
If you’re a couple aged around 65, ASFA suggests you need to spend $60,604 a year to live comfortably, while singles need to spend $42,953. Both those figures are up around 0.5 per cent on the March quarter.
For a modest retirement, couples are looking at $39,442 a year and singles at $27,425. Those figures are up by around 0.2 per cent.
Older retirees aged 85 and over will need to spend $56,548 a year to live comfortably as a couple and $40,798 if they’re single.
This same cohort looking for a modest retirement will need to spend $25,927 a year if they’re single and $37,004 in a couple.
"A useful thing you can do is get in touch with your superannuation fund to find out what options are available, so that you have the best chance of coping with future increases in health care and other expenses to live your post-work years free from major financial worries," Mr Fahy said.