The Association of Superannuation Funds of Australia (ASFA) says the cost of a comfortable retirement for couples has risen by $1,131 annually, compared to this time last year. The cost of a comfortable retirement for singles has risen by $767.
These estimates are contained in the latest update to the ASFA Retirement Standard. The cost of a comfortable retirement for couples rose 0.3% in the September 2014 quarter. ASFA says this would require a joint superannuation balance of “around $510,000.” The cost of a comfortable retirement for singles rose more, 0.4%, requiring a super balance of “around $430,000.”
The cost of a modest retirement rose by 0.4% ($664) for couples and 0.5% ($457) for singles, compared to September 2013.
ASFA CEO Pauline Vamos said the rising cost of living shows how important it is to save as much superannuation as can be afforded before retirement.
In the year to September 2014 prices of fruit rose 19.2% and vegetables rose 10%. Health costs rose 4.7% in the same period, largely due to the cost of medical and hospital services, which rose 6.2%.
“When you are no longer relying on a wage or salary, even small increases in the cost of living can hit hard, particularly when non-discretionary items such as food or medicines are affected. The best way to shield yourself against increasing costs is to save as much money as you can while you are working. This will give you the financial freedom to live the lifestyle you want in retirement,” Ms Vamos said.
“It’s also important that people think about creating or buying an income stream that will spread your superannuation savings across your retirement years and that can be adjusted to accommodate rising prices.”
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