Charting the upward cost of retirement living
Friday 22 July, 2011 | SuperLiving
FOOD, petrol and pharmaceutical prices continue to be the driving factors in the ever increasing cost of retirement, according to the latest numbers by the Association of Super Funds of Australia (ASFA).
The ASFA’s Retirement Standard index is a quarterly
released update that charts the seemingly relentless swelling of
retirement lifestyle expenses. The new report shows that a retired
couple will need $54,562 per year to live a comfortable lifestyle. This
is up almost $700 dollars from last quarter, where skyrocketing food prices were also a primary factor.
For the purposes of the study, a “comfortable” retirement lifestyle is
defined as having a range of entertainment activities, household goods
and services. This includes private health insurance, a car, a range of
electronic equipment and both domestic and occasional international
travel.
The ASFA defines “modest” retirement living as a significantly more
sustenance-based standard, “better than the Age Pension, but still only
able to afford fairly basic activities”.
The study tracks retirement lifestyle costs by weighing expenses as they relate to retirees.
While retirees generally spend less on housing and education, they are
likely to have greater budgets for health, recreation and food. Food
returned as a major determinant this quarter with a price increase of
over 14%.
The area with the largest increase in cost of living was Melbourne, followed by Sydney and Adelaide.
Budgets for various households and living standards
| |
Modest lifestyle – single | Modest lifestyle – couple | Comfortable lifestyle – single | Comfortable lifestyle – couple |
| Housing – ongoing only | $55.67 | $54.40 | $65.68 | $76.14 |
| Energy | $32.19 | $42.76 | $32.67 | $44.31 |
| Food | $74.88 | $155.10 | $106.97 | $192.54 |
| Clothing | $17.49 | $28.39 | $37.86 | $56.79 |
| Household goods and services | $25.61 | $34.73 | $72.05 | $84.40 |
| Health | $34.41 | $66.41 | $68.27 | $120.49 |
| Transport | $90.98 | $93.56 | $135.58 | $138.16 |
| Leisure | $72.60 | $108.17 | $220.02 | $301.51 |
| Communications | $9.17 | $16.05 | $25.19 | $32.06 |
| Total per week | $414.00 | $599.56 | $764.28 | $1046.39 |
| Total per year | $21,587 | $31,263 | $39,852 | $54,562 |
This table assumes the retiree is 70-years-old and owns their own home. Calculations for singles are for women. All calculations are weekly, unless otherwise noted.
Recognising that retirement age groups vary rather widely, the ASFA introduced this quarter a retirement standard index for people at age 90. Despite increased budgets for household and health expenses, the more senior retirees experience lower overall totals than the 70-year-old group.
The ASFA explains this with the older generation’s reduced transportation and travel expenses, another hint that petrol will play a large role in future household budgets.
Draft budgets for various households and living standards, age 90
| |
Modest lifestyle – single | Modest lifestyle – couple | Comfortable lifestyle – single | Comfortable lifestyle – couple |
| Housing – ongoing only | $56.67 | $54.40 | $65.68 | $76.14 |
| Energy | $32.19 | $42.76 | $32.67 | $44.31 |
| Food | $74.88 | $155.10 | $106.97 | $192.54 |
| Clothing | $17.49 | $28.39 | $37.86 | $56.79 |
| Household goods and services | $35.61 | $49.73 | $122.05 | $139.40 |
| Health | $74.25 | $107.09 | $117.82 | $178.26 |
| Transport | $37.58 | $45.16 | $42.58 | $49.16 |
| Leisure | $57.80 | $95.85 | $154.41 | $169.23 |
| Communications | $9.17 | $16.05 | $25.19 | $32.06 |
| Total per week | $395.64 | $594.53 | $705.23 | $937.89 |
| Total per year | $30,630 | $31,000 | $36,770 | $48,900 |
This table assumes the retiree is 90 years old and owns their own home. Calculations for singles are for women. All calculations are weekly, unless otherwise noted.
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