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Cost of living squeezes retiree budgets

Yasmine Masi25 August 2023
Man shakes empty piggy bank

Inflationary pressures driving higher cost of living expenses has forced retirees to tighten their household budgets, with the annual expenditure needed to enjoy retirement comfortably climbing in the June quarter.

Retiree spending rose by 0.5 per cent to reach a record high of $70,806 for couples and $50,207 for singles which accounts for a 6.1 per cent annual increase, according to the Association of Superannuation Funds Australia (ASFA).

Products and services such as home and motor vehicle insurance (5.3 per cent), furniture (4.2 per cent) and household textiles (9.5 per cent). saw the highest quarterly jumps. Fruit and vegetables were up by 2.4 per cent across the quarter after cooler weather impacted the supply of tomatoes and cucumbers, while takeaway food also rose by 1.7 per cent.

“Retiree budgets have been under substantial pressure for nearly two years due to high costs of essential goods and services,” ASFA Deputy CEO, Glen McCrea, said.

“Price rises in the cost of food were significant in the June quarter. The price of bread increased more than 5 per cent and is up 14 per cent over the year.

“The cost of vegetables was up almost 4 per cent over the three-month period, with the noticeably higher cost of potatoes due to a shortage linked to unfavourable growing conditions last year. This impacts on a range of products, including hot chips, potato crisps and frozen potato products.”

“Once again, putting dinner on the table became more expensive, with the cost of poultry, dairy, vegetables and potatoes up significantly, added Glen McCrea.

While electricity and gas costs saw a minimal decline during the quarter, this was effectively reversed once cost increases came into effect from 1 July.

According to ASFA, the superannuation balance required to achieve a comfortable retirement for those aged 67 is $690,000 for couples and $595,000 for singles.

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