Aussie retirees better off than overseas peers
Despite the globally rising costs of living, Australian retirees are in a stronger position than their international counterparts as compulsory superannuation provides a comfortable buffer to minimise the impact of global factors driving costs higher, according to the Association of Superannuation Funds of Australia (ASFA) Retirement Standard September Quarter 2022.
The investments made in superannuation over the last three decades acted as a buffer during the time of strong headwinds, meaning that the Age Pension remained affordable for the Government in Australia and leaving retirees, on average, with larger private retirement savings balances at times when governments in Europe and the UK were considering raising the retirement age or cutting the amount of pension retirees.
ASFA noted that the causes of the increases across the major categories of expenditures lie mainly outside Australia and included food, transport and energy which all saw higher prices over the past quarter.
“The global energy crisis, raw material scarcity, and supply chain disruptions caused by ongoing COVID lockdowns in China are converging to pose significant inflationary challenges globally and here at home,” ASFA’s deputy chief executive, Glen McCrea said.
According to the latest figures, couples aged around 65 living in a comfortable retirement would now need to spend $68,014 per year and singles $48,266, both went up by 1.9% on the previous quarter.
Additionally, over the year to September 2022, the amount needed for a single person to fund a comfortable retirement rose by 6.7% and for a couple by 6.6%, slightly lower than annual CPI (Consumer Price Index) of 7.3%.
In the September quarter, the strong price rises were recorded across all food and non-food grocery products, with fruit and vegetables prices going up by 16.2% and dairy products rising 12.1%.
On top of this, imported inflation saw oils and fats up 19.3%. coffee up 10.7% and gas 16.6% and automotive fuel 18.0%.
Increased demand combined with high fuel prices and capacity constraints also saw domestic travel and accommodation went up by 10.8% and international travel and accommodation was up 25.3%.
The ASFA Comfortable budget assumes one major trip overseas every seven years.
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