Retirement costs on the rise

5 February 2013

| By Staff |

Retirees will need to save more to fund their retirement, according to figures released by the Association of Superannuation Funds of Australia (ASFA).

ASFA has revised its assessment of retirement funding and said the amount needed for a couple to achieve a ‘comfortable' retirement had increased by 2 per cent, while the amount needed to fund a modest retirement had been bumped up by 2.8 per cent since the December 2011 figures.

ASFA said those figures had increased from $55,249 to $56,339 and $31,675 to $32,555 in December 2012 respectively.

The most significant impact on the increasing cost of retirement was for domestic travel and accommodation, which increased by 6.2 per cent, followed by automotive fuel increasing by 2.6 per cent. Those seeking a ‘comfortable' retirement were particularly affected, ASFA said.

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A 3.5 per cent decrease in the cost of pharmaceuticals as a result of a greater number of consumers utilising the Pharmaceutical Benefits Scheme had a downward effect on health costs in December compared to September, ASFA said.

But the last 12 months has seen health costs increase by 7.7 per cent overall, with a 9.4 per cent increase in the cost of medical and hospital services, 5.4 per cent for pharmaceutical products and 3.4 per cent for dental services.

The cost of vegetables dropped 5.7 per cent and audio, visual and computing equipment by 4.3 per cent, while pharmaceutical costs reduced by 3.5 per cent.

ASFA said a 5.7 per cent fall in vegetable prices was partially offset by an 6 per cent increase in the cost of poultry, a 1.7 per cent increase for fruit and for cake and biscuits.

The leisure activities component increased, mainly due to an increase in the cost of domestic travel and holidays, by 6.2 per cent over the Christmas and New Year period.

This rise was partially offset by falls in audio, visual and computing equipment and international holiday travel and accommodation, ASFA said.

Originally published on Money Management.

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