Retirement costs fall in June quarter

The amount needed for couples aged 65 living a comfortable retirement dropped 0.8% during the June quarter 2020 to $61,909 a year and down 1.1% for singles to $43,687, as the cost of living came down, according to data.

The Association of Superannuation Funds of Australia (ASFA) data found that despite the impact of the COVID-19 pandemic, the cost of living for retirees came down during the June quarter for everyday expenses including petrol, electricity, gas, and water.

ASFA chief executive, Dr Martin Fahy, said: “Dramatic changes in our lifestyles have had a big impact on demand and prices right across the economy. With fewer of us commuting by road, the price of petrol has plummeted around 20% in the June quarter.

“At the same time, with so many Australians suspending travel plans and staying at home, the cost of household appliances, furniture and gardening equipment went up.”

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While there were travel restrictions domestically and internationally along with reduced discretionary spending that may have created a short-term budget saving, retirees would also be experiencing relatively low investment returns.

ASFA noted that older retirees continued to experience financial pressures as retirement budgets for older retirees, aged around 85, were unchanged at the comfortable level from the previous quarter and down by around 0.2% at the modest level.

Details for the retirement budget price changes:

• The price of electricity fell 2.5%
• The price of gas fell 0.9%
• The price of water fell 0.6%
• Health insurance premiums were frozen
• The price of cleaning and maintenance products rose 6.2%
• The price of other non-durable household products rose 4.5% (including toilet paper and cleaning wipes)
• The price of furniture rose 3.8%
• The price of major household appliances rose 3.0% (strong demand for products such as home office furniture and fridges and freezers).
• The price of gardening equipment products rose 1.8%
• The price of non-alcoholic beverages rose 2%
• The price of wine rose 1%, beer rose 0.8%,
• The price of food eaten at home rose 0.5%
• The price of takeaway meals rose 0.3%