The cost of retirement coming down in the June quarter

Dramatic changes in our lifestyles have had a big impact on demand and prices right across the economy.

The obvious current restrictions on domestic and international travel (the price of petrol has plummeted around 20 per cent in the June quarter), along with reduced discretionary spending on entertainment and dining-out may have created a short-term budget savings for some retirees.

That said, retirees will also be experiencing relatively low investment returns pointing to the need to having sufficient superannuation savings to support the retirement lifestyle that Australians want and deserve.

Even with the cost of living down for retirees in the June quarter, mainly due to a drop in everyday expenses such as petrol, electricity, gas and water, older retirees continued to experience financial pressures. Retirement budgets for older retirees, aged around 85, were unchanged at the comfortable level from the previous quarter and down by around 0.2 per cent at the modest level.

 

Details for the retirement budget price changes

  • The price of electricity fell 2.5%
  • The price of gas fell 0.9%
  • The price of water fell 0.6%
  • Health insurance premiums were frozen
  • The price of cleaning and maintenance products rose 6.2%
  • The price of other non-durable household products rose 4.5% (this includes toilet paper and cleaning wipes)
  • The price of furniture rose 3.8%
  • The price of major household appliances rose 3.0% (strong demand for products such as home office furniture and fridges and freezers).
  • The price of gardening equipment products rose 1.8%
  • The price of non-alcoholic beverages rose 2%
  • The price of wine rose 1%, beer rose 0.8%,
  • The price of food eaten at home rose 0.5%
  • The price of take away meals rose 0.3%

Details for the various updated budgets follow.

Table 1: Budgets for various households and living standards for those aged around 65 (June quarter 2020, national)

Household type
Single Modest
Couple Modest
Single Comfortable
Couple Comfortable
Housing – ongoing only $101.87 $114.50 $119.33 $124.73
Energy $36.04 $48.40 $45.66 $56.62
Food $94.52 $175.23 $122.20 $212.39
Clothing $20.51 $38.98 $24.70 $51.02
Household goods and services $35.18 $41.17 $76.86 $94.74
Healtd $50.16 $96.72 $102.88 $192.51
Transport $83.06 $88.87 $135.44 $147.09
Leisure $95.24 $149.95 $184.68 $277.65
Communications $17.97 $20.24 $22.47 $29.25
Total per week $534.53 $773.57 $836.92 $1,816.00
Total per year $27,902 $40,380 $43,687 $61,909

 

Table 2: Budgets for various households and living standards for those aged around 85 (June quarter 2020, national)

Household type
Single Modest
Couple Modest
Single Comfortable
Couple Comfortable
Housing – ongoing only $101.87 $114.50 $119.33 $124.73
Energy $36.04 $48.40 $45.66 $56.62
Food $94.52 $175.23 $122.20 $212.39
Clothing $20.51 $38.98 $27.40 $51.02
Household goods and services $52.16 $74.75 $153.27 $183.63
Health $86.34 $121.00 $143.49 $226.81
Transport $39.99 $49.98 $44.99 $54.98
Leisure $62.37 $89.19 $128.51 $180.82
Communications $17.97 $20.24 $22.47 $29.25
Total per week $511.76 $732.27 $807.31 $1,120.25
Total per year $26,714 $38,225 $42,141 $58,477

 

The figures in each case assume that the retiree/s own their own home and relate to expenditure by the household. This can be greater than household income after income tax where there is a drawdown on capital over the period of retirement. All calculations are weekly, unless otherwise stated. Annual figure is 52.2 times the weekly figure.

More information
Costs and summary figures can be accessed via the ASFA website. You can find out more about superannuation on the independent Super Guru website or of course by reaching out to one of the Inspired Money Team.

 

 

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