Cost of retirement inflated by food and health prices: ASFA

The Association of Superannuation Funds of Australia (ASFA) has found the cost of leading a comfortable retirement has continued to rise over the March quarter, now costing close to an extra $700 per year.

The ASFA Retirement Standard has found that the cost of living comfortably for a couple was up 1.3 per cent over the quarter to $54,562.

Those seeking a modest retirement lifestyle will now need $31,263 per year, up from $30,708 in the December quarter.

ASFA identified the rising prices of food, fuel and pharmaceuticals as contributing to the increased cost of living.

Food in particular was a major contributor, rising 2.9 per cent over the quarter due to adverse growing conditions for some fruit and vegetables.

The cost of health services between December and March quarters also rose by 3.9 per cent, largely due to the cyclical effect of the Pharmaceutical Benefits Scheme safety net benefiting fewer people at the start of the calendar year.

For the first time, ASFA also published figures for the cost of living for a 90 year old, which varies significantly to that of a 70-year-old wishing to have a comfortable retirement.

It found the total cost of living per year for a 90-year-old couple leading a comfortable lifestyle was $48,900 — a difference of $5,600 from that of a 70-year-old couple.

ASFA measures a comfortable lifestyle as enabling retirees to be involved in a broad range of leisure activities, as well as be able to afford private health insurance, a reasonable car, good clothes and domestic and occasionally international holiday travel.

A modest retirement is measured as being better than the age pension, but still only allowing retirees to afford basic activities.