The cost of living for single and couple retirees saw a modest increase of 0.2 per cent in the September quarter while budgets for older retirees also rose by 0.2 per cent at both the modest and comfortable levels, the Association of Superannuation Funds of Australia (ASFA) Retirement Standard data showed.
Factors contributing to the increase in annual budgets were price rises in pharmaceutical products (+0.7 per cent), medical and hospital services (+0.2 per cent), international holiday travel and accommodation (+4.6 per cent), fruit (+8.2 per cent) and property rates and charges (+4.6 per cent).
ASFA chief executive, Pauline Vamos, said that while the rise in cost of living was not significant, the amount required were still higher than average balances, posing a challenge for retirees to save enough to fund a comfortable retirement.
"Saving an adequate amount for retirement is likely to get harder rather than easier in the future as governments respond to the ageing population by looking for ways for individuals to make greater private contributions to health and aged care," she said.
"Surveys of the population show that most persons who have not yet retired want to achieve at least the ASFA comfortable level of lifestyle in retirement."
But she said only 20 per cent of retirees reach that living standard at the moment, but added that 50 per cent could reach it if the superannuation guarantee level increased to 12 per cent of wages and people increased their voluntary savings.
Vamos also warned that any changes to super taxation should take into account the effects on final retirement outcomes.
"We should not mortgage the future living standards of retirees in order to deal with short term budget challenges of governments".