Couples aged around 65 living a comfortable retirement need to spend $65,445 per year while singles need to spend $46,494, up by 1% and 1.2% respectively on the previous quarter.
Data from the Association of Superannuation Funds of Australia (ASFA) showed the annual percentage increases in the comfortable budgets for retirement-aged Australians were the largest since 2010.
Over the year to March 2022, prices were up by around 4.2% for the comfortable couple budget and by 4.7% for the comfortable single budget.
ASFA deputy chief executive, Glen McCrea, said: “While this is marginally smaller than the annual inflation impact of 5.1% for wage earners, the reality is that retirees are doing it tough too”.
Over the year to March 2022 the Age Pension increased by 3.7%, and Age Pensioners and Seniors Health Card holders also benefitted from a $250 one-off payment in April 2022. Additionally, there was a reduction in the minimum drawdown factor for retirees with a superannuation account-based income stream.
While that reduction was welcomed by at least some retirees, others needed to draw down more than the minimum in order to meet living costs.
However, the percentage increases in the budgets for those aged around 65 were less than the increase in the March quarter All Groups CPI of 2.1% and 5.1% compared to a year earlier.
“Retirees have faced significant price increases for non-discretionary items such as food, automotive fuel, and health costs,” McCrea said.
ASFA said retiree households would continue to face ever-increasing health costs as well as for household power.
“While there is considerable subsidisation of health costs and benefits being paid from private health insurance, out of pocket expenses remain substantial for items such as dental treatment, optical expenses, and gap payments for procedures in hospitals, and private health insurance premiums also continue to increase. Substantial increases in the cost of electricity and gas are also expected.”
Meanwhile, retirement budgets for those aged around 85 were up by 1.2% from the previous quarter.
“The older retiree budgets were not directly affected by the increase in petrol prices, which were significant in the March quarter, as there is no allowance for car ownership for this age group. However, older retirees are facing other increases in costs including food and medical costs. Rising petrol prices also feed into the cost of goods and services purchased by older retirees.”