The cost of living in the ‘modest’ category has increased by 2.9 per cent over the past year, with energy costs rising by around 17 per cent and healthcare costs rising by 6.6 per cent, according to ASFA research.
Expenditure within the ‘comfortable’ standard of retirement also rose by 2.1 per cent.
Victoria was identified as the most expensive state for retirees, with the modest lifestyle of a single retiree in Melbourne costing $23,024 a year, 1.6 per cent above the national average of $22,654, while a couple living comfortably spend around $56,888 per annum.
ASFA acting chief executive Ross Clare said the research shows that retirees on lower incomes are under greater pressure with these cost increases. The results emphasise the importance of people saving now to prepare for the retirement they want, he added.
ASFA calculated that an average single person will require $430,000 for a ‘comfortable’ standard of living in retirement.
"A person currently aged 30, who is earning $50,000 a year and who has a current superannuation balance of $10,000, would have to contribute an additional 3 per cent of their wage as salary sacrifice contributions to reach the level of retirement savings required for a comfortable standard of living in retirement, even taking into account the increase in compulsory contributions to 12 per cent of wages that is currently being phased in," said Mr Clare.
Even a 50 year-old with an income of $100,000 a year and a $150,000 superannuation balance will still need to contribute an additional 1 per cent of their wage as salary sacrifice contributions to achieve a ‘comfortable’ living standard in retirement, according to the ASFA research.
However, by contributing just a few dollars a week it was possible to add thousands to your superannuation balance in retirement, Mr Clare added. He said that planning now would enable people to achieve their desired lifestyle in their post-work years.
