In the last quarter of the 2021 calendar year, automotive fuel costs rose 6.6%, vehicles rose 1.9%, and general food costs increased by 1% too, while dairy products increased by 1.7%. The cumulative impact of these inflationary price hikes means that Australian retirees’ budgets are under threat by the rise of everyday living expenses.
The Association of Superannuation Funds of Australia (ASFA) Retirement Standard for the December 2021 quarter indicates that couples aged around 65 living a comfortable retirement needs to spend $64,771 per year and singles $45,962, up by 1.5% and 1.6% respectively on the previous quarter. Over the year, prices were up by around 3.5% for the comfortable couple budget and by 3.9% for the comfortable single budget. The annual percentage increases in the comfortable budgets are the largest seen since 2010.
“Australian retirees are now facing significant pressure on their budgets from non-discretionary inflation,” ASFA deputy chief executive Glen McCrea said. “This means unavoidable price increases on goods and services such as food, petrol and health costs. It’s critical that future retirees are able to build sufficient retirement savings to ensure they can have dignity, health, vitality, and connection in retirement.”
The research also found that price increases for retirees are outstripping those for employees. Retirees haven’t been able to simply switch what they buy to save. While health costs are largely subsidised, out-of-pocket expenses remain substantial for items such as dental treatment and, particularly in recent months, the cost of COVID-19 rapid antigen tests (R.A.T.s).
“It’s so important that future retirees are able to build sufficient savings over their working lives to ensure they can face retirement with financial confidence,” McCrea said. “Over the last couple of years, the balances of women and low-income earners have been impacted by the acceleration of price increases, COVID-19 and policies such as the early release of super”.
The government must address the repair of people’s retirement budgets, as we emerge from the COVID-19 crisis. However, you can talk to us today about the steps you can take to improve your financial position.
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