POWERED BY MOMENTUM MEDIA
Cheaper retirement for those seeking comfort
The Association of Superannuation funds of Australia (ASFA), in its latest retirement standard, found that couples seeking a modest retirement experienced increasing costs in the March quarter whilst those seeking a comfortable retirement found their costs decreased.
Energy and health costs are pushing up retiree's expenditure but couples seeking a comfortable retirement were rewarded by declining costs for overseas travel and audio, visual and computing equipment.
However, with a decrease of less than 0.1 per cent between the December and March quarters in aggregate terms, this equated to $1 extra per week and an outlay of $56,317 a year per couple per annum to achieve a comfortable lifestyle.
Decreasing costs stemmed from a fall in the cost of leisure goods and services as well as the strong exchange rate bringing down the cost of overseas holidays and items such as computers and televisions.
The cost of leisure foods and services fell by 0.8 per cent between December and March, with overseas travel falling by 5.2 per cent. Audio, visual and computing equipment fell by 4.7 per cent.
Conversely, couples seeking a modest retirement have less leisure items in their budgets and needed to spend $32,603 per annum, a slight increase on last quarter's results, ASFA said.
A huge increase in the price of electricity over the year may be at fault. The cost of electricity continued to rise, increasing 2.4 per cent over the quarter and 14.4 per cent in the 12 months to March.
The cost of health services also continued to edge up with a 3 per cent increase this quarter, mainly due to a 7.6 per cent jump in the cost of pharmaceutical prices as fewer individuals benefit from the Pharmaceutical Benefits Scheme safety net. Over the year health costs increased 6.1 per cent.
The cost of food fell 0.8 per cent over the quarter due to pressure on the cost of fruit and vegetables, but it increased 1.6 per cent over the year to March.
A 0.5 per cent increase in transport costs and 1.2 per cent increase in fuel was partially offset by a decrease in the cost of motor vehicles.
Communications costs were unchanged this quarter and had little impact on retiree budgets over the year increasing 1.5 per cent.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
