Retirees’ living costs have continued to escalate, according to the latest Westpac/Association of Superannuation Funds of Australia (ASFA) Retirement Standard research report.
During the September quarter 2007, the living expenses for retired couples rose by 0.6 per cent.
“The increases we’ve seen in everyday costs this quarter are a timely reminder of just how important good retirement planning is to ensure we can meet the cost of living that we may expect in 10, 20 or even 30 years,” Westpac Financial Planning head of customer and sales development Paula Calvert told InvestorDaily.
“With good financial planning, advisers can work with their clients on an individual basis to establish realistic budget expectations that support the kind of lifestyle they expect in retirement.
“Setting realistic goals that can be understood with regard to everyday expenses is a great way for customers to start mapping out their goals and implementing strategies to ensure they reach them.”
For couples on a comfortable retirement lifestyle, the cost of living increased to $48,648 per annum.
In comparison, couples with modest living requirements need a yearly budget of $26,339.
“The drought continued to play a major part in driving up the cost of living for retirees through higher food costs. During the quarter, food prices rose by a total of 1.9 per cent,” the report said.
The cost of seasonal produce, such as fruit and vegetables, grew significantly, increasing by 9.6 per cent and 7.9 per cent respectively.
Beer prices were up 0.7 per cent and wine prices fell by 0.4 per cent.
The cost of other essential items increased markedly. Utility prices rose across the board with electricity costs increasing by 4.3 per cent, while water and sewerage charges grew by 5.5 per cent.
The cost of leisure also went up. For retirees going abroad, the cost of overseas travel rose by 4.2 per cent. In contrast, domestic holidays and accommodation costs increased by 1.8 per cent.
Healthcare costs bucked the trend. These costs fell by 0.5 per cent, resulting largely from a decrease in the net cost of pharmaceuticals.
For motorists, petrol prices fell by 3.7 per cent during the quarter.
