The cost of retirement in Australia has reached record highs, with retirees facing increasing financial pressure due to rising living expenses. According to the Association of Superannuation Funds of Australia (ASFA), a single person now needs at least $52,085 per year to enjoy a comfortable retirement if they own their own home, while a couple requires at least $73,337. These figures have risen by 0.9 per cent in the June quarter and 3.7 per cent over the past 12 months.
Chris Grice, the chief executive officer of National Seniors Australia, stated that many older Aussies are being pushed to “breaking point” due to rising costs. “This is especially true for many older Australians without savings or who are at the mercy of an unforgiving rental market, who have described their experience of hardship and uncertainty as ‘existing’, ‘surviving’, ‘helpless’, and ‘hopeless’,” he said. ASFA noted that home, vehicle, and private health insurance costs went up in the June quarter, further squeezing retirees’ savings.
Mary Delahunty, the Association’s CEO, emphasized the importance of having a retirement plan that doesn’t solely depend on superannuation, as this can provide retirees with the financial security needed to enjoy their twilight years. “Retirees are managing an increasingly difficult landscape where the costs of essential goods and services keep rising. Health, home, and transport are vital to their well-being, yet the expenses tied to these necessities are steadily increasing,” she said.
Several factors are contributing to the financial stress faced by retirees:
1. Insurance premiums rose by 3.1 per cent in the June quarter and 14 per cent over the past year, largely due to higher reinsurance costs, the impact of natural disasters, and increased claims. 2.
Rising costs strain Australian retirees
Private health insurance premiums increased by an average of 3.03 per cent since April, the largest rise since the pandemic began. 3.
Electricity costs jumped by 2.1 per cent in the last three months and 6 per cent over the past year. 4. Annual food inflation dropped from 3.8 per cent to 3.3 per cent between the March and June quarters, but retirees still face rising costs for essentials like fruits and vegetables, which are 3.7 per cent higher than a year ago.
5. Prices for clothing and footwear rose by 3.1 per cent during the quarter, driven by new season stock and the end of sales promotions. 6.
Fuel prices have increased by 1.7 per cent in the June quarter. 7. Domestic travel costs remained stable in the quarter, but international travel and accommodation expenses increased by 8.1 per cent.
ASFA provided data on how much a retiree could spend on certain items per week without breaking the bank. Delahunty concluded, “For Australians to have the retirement they deserve, it’s crucial that they have access to adequate superannuation savings.”
