Retirement
Retirees still suffering despite low inflation levels
A low inflation rate is not materially aiding retirees still struggling with their budgets, according to new research.
Retirees still suffering despite low inflation levels
A low inflation rate is not materially aiding retirees still struggling with their budgets, according to new research.
In the new report released by The Association of Superannuation Funds of Australia (ASFA), there’s been a “modest” increase in retiree expenses despite lagging inflation.
The 0.6 per cent increase for singles and 0.5 per cent increase for couples have been reported as equating to coupled-up retirees needing to spend $918 more a year, while singles are finding themselves spending an extra $648.
It means that in 2019, couples aged around 65 require $61,522 per year for a comfortable living, while singles now require $43,601.
Budgets for older retirees rose from the previous quarter by 0.7 per cent at a comfortable level and 0.5 per cent at the modest level.
ASFA’s CEO, Dr Martin Fahy, said the rise in CPI might not look like much, but it is putting significant strain on retirees.
“The drought has impacted on the prices of a range of food. The cost of private health insurance continues to grow at around twice the general rate of inflation, and petrol prices are up,” he explained.
The increased strain placed on retirees has meant that Dr Fahy welcomed the decision to lower the deeming rates, indicating that it will help to ease some of the pressures facing older Australians.
He said that “many retirees would have welcomed the recent decision to decrease the deeming rate in the asset test for the Age Pension. But at the same time, they have been facing increased costs of living and lower returns from investments, such as term deposits.”
The costs for retirees that have increased substantially over the last 12 months are:
- Price of bread up 4.8 per cent
- Price of beef up 6.0 per cent; lamb up 13.5 per cent
- Price of milk up 2.9 per cent
- Price of fruit up 4.9 per cent
- Price of vegetables up 6.2 per cent
- Price of beer up 2.5 per cent
- Property rates up 2.3 per cent
- Price of hairdressing up 2.9 per cent
- Price of private health insurance up 3.25 per cent on average
- Price of dental services up 2.3 per cent
- Price of domestic travel up 3.5 per cent and price of international travel 4.1 per cent
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