Retirement costs increase as healthcare expenses grow
Retirement costs increased in this year’s June quarter, with the costs of health services, transport and clothing the main drivers, the Association of Superannuation Funds of Australia (ASFA) has found.
The increase saw the ASFA Retirement Standard go up around 0.5 per cent on the last quarter, with couples around 65 wanting a comfortable retirement now needing $60,605 per year and singles $42,953. At the same time, the Consumer Price Index for the quarter increased 0.4 per cent.
The burden of healthcare costs on retiree households was evident in this increase. Healthcare costs in the budgets rose by over 2.2 per cent in the quarter, largely driven by a four per cent increase on average in private health insurance premiums.
The Grattan Institute recently found that people over 65 years old now account for 26 per cent of GP consultations in Australia, with the bulk of these appointments leading to the purchase of both prescription and non-prescription medications.
Specialist procedure and surgery costs increased the sting of medical costs for retirees too; the average payment gap for knee surgery in Australia, for example, is around $2,000. Dental expenses also hit retirees heavily, with reimbursement from private health insurance often limited.
At the same time as healthcare increased, the June quarter saw retiree budgets for transport increase by 1.7 per cent and clothing and footwear costs also climb. ASFA put this down to heightened fuel costs and discontinued clothing specials respectively.
Positively, retiree budgets showed a 0.4 per cent in food costs as the cost of fruit and vegetables during the quarter fell three per cent. Leisure expenses also fell, most likely because it was the off-season for holidaying.
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