In this guide
Inflation hits retiree budgets …
Annual budgets for a comfortable lifestyle in retirement rose by 3.5% for a couple and 3.6% for a single over the year, according to the latest Association of Superannuation Funds of Australia (ASFA) Retirement Standard for September.
A homeowning couple aged 65 to 84 now needs an annual budget of $76,505 for a comfortable lifestyle in retirement, while a single person needs $54,240.
“Retirees might be feeling the squeeze this Christmas because prices have risen fastest in the things they spend most on, like food, energy and health. Some older people may cut back on pricier gifts, travel and social occasions to stay on top of the basics,” ASFA chief executive officer Mary Delahunty said.
Over the quarter, electricity prices rose by 9%, property rates were up by 6.3% and audio, visual, media and services rose by 9.3%. Domestic holiday travel and accommodation rose by 5.2% and the cost of eating out and takeaway was up by 1.3%.
The ASFA standard found that for a modest lifestyle, a single homeowner would need a budget of $35,199 per year and a homeowner couple would need a budget of $50,866. For people renting, a single person would need $49,676 per year to fund a modest lifestyle, while a couple would need $67,125.
… but opinions differ on how much is enough to retire comfortably
Super Consumers Australia (SCA) has estimated that a single homeowner will need around $322,000 in super for a comfortable retirement by the time they reach 65, with couples needing a combined $432,000.
“You might already be on track for a comfortable retirement and not realise,” SCA deputy chief executive officer Katrina Ellis said.
“For many people, this is good news – by knowing your Retirement Super Target you can balance your quality of life now with your quality of life in retirement,” she said.
The data is based on single homeowning retirees spending $1,690 per fortnight ($43,930 per year) in retirement, significantly lower than ASFA’s estimate of $54,240 per year. The SCA also calculates the balance required for a retiree who wants to spend $2,350 per fortnight ($61,100 per year), that is, a total super balance on retirement at 65 of $891,000. This is substantially higher than ASFA’s comfortable standard.
Both figures assume the Age Pension will also contribute to retirement income, with it funding 67% of the medium spending level and 29% of the high spending level.
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