According to the ASFA Retirement Standard for the December quarter, couples aged around 65 need to spend $62,269 per year and singles will have to cough up $44,146, up 0.8 per cent for each on the previous quarter.
The changes are slightly more than the increase in the All groups Consumer Price Index (CPI) of 0.7 per cent between the September and December quarters.
Over the year to the December quarter, 2019 costs were up around 2.1 per cent for couples, in contrast to a 1.8 per cent uptick in the All groups CPI.
To live comfortably, couples have needed to spend $1,292 more per year, while singles need to drop $829 more.
ASFA chief executive, Dr Martin Fahy said the drought has hit food prices along with other cost impacts.
“While the recent rains are very welcome, meat prices are likely to increase even further as farmers hold back their breeding stock from the market,” Dr Fahy said.
The overall cost of food has increased by 2.6 per cent over the last year, largely as a result of the drought, ASFA noted.
Beef went up by 8.2 per cent, pork by 7.9 per cent and poultry increased by 3.2 per cent. Vegetables were recorded to rise by 3.7 per cent.
The price of milk was up by 6.4 per cent, while cheese increased by 5.7 per cent. The price of eggs was up by 5.2 per cent.
Bread rose by 3.1 per cent, cake by 4.5 per cent and cereal products inched up by 2.8 per cent.
Takeaway was also impacted, with prices up by 2.4 per cent with the rise of ingredient costs.
Looking at figures between the September and December quarters, there was a 6.8 per cent rise in fruit prices and a 2.9 per cent increase in beef and veal.
Drought conditions were also reported to affect the prices for other fresh produce, including grapes, melons, onions, potatoes, eggs, rice and prawns.
Other costs for home ownership and fuel also were on the up. In its work, ASFA has assumed retirees have car and home ownership.
Home maintenance costs increased by 2.7 per cent, water and sewerage charges stepped up by 2.9 per cent and property rates were up by 2.5 per cent.
Rent was only up by 0.2 per cent on average over the year, but ASFA noted renters have much higher housing costs in retirement than home owners do.
There was also variation between states in the rate of price increases over the year. Prices on average increased by around 0.5 per cent over the year in Darwin, but were substantially higher in Hobart, rising by 2.7 per cent.
Hobart in particular has seen its cost of living affected by a “strong increase in the cost of domestic holidays due to increased tourist demand in Tasmania”, ASFA stated.
Sarah Simpkins
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
