Retirement costs up 0.5 per cent

The aggregate cost for a couple living comfortably in retirement increased by 0.5 per cent in the September quarter to nearly $54,000 a year, according to the latest Westpac ASFA Retirement Standard.

The Retirement Standard, compiled by Westpac and the Association of Superannuation Funds of Australia (ASFA), provides a picture of what retirees may need to spend to support their lifestyle. The study considers a modest retirement lifestyle to be better than the age pension (although the retiree would only be able to afford basic activities), while a comfortable retirement lifestyle is one that would enable an older, healthy retiree to be involved in a broad range of leisure and recreational activities and have a “good standard of living” through the purchase of household goods, private health insurance, et cetera.

The September quarter showed that a couple looking to achieve a comfortable retirement would need to spend $53,729 a year, while those couples seeking a modest retirement lifestyle needed to spend $30,557 a year. Singles would have to spend $21,132 a year to support a modest retirement lifestyle, and $39,302 a year for a comfortable retirement lifestyle.

The most significant price increases in the September quarter were water and sewerage rates (up 12.8 per cent), electricity (up 6 per cent) and property rates and charges (up 6.2 per cent). However, retiree households also benefitted from falls in the price of fuel (down 3.7 per cent), vegetables (down 5.4 per cent), pharmaceuticals (down 3.9 per cent) and audio, visual and computing equipment (down 2.7 per cent). The falls were attributed to a strong Australian dollar, the easing of the drought, and the Pharmaceutical Benefits Scheme.