According to ASFA, in the forth quarter of 2013/14 the cost of a ‘comfortable retirement’ rose 0.5%, to $58,128 per year. To fund this would require a superannuation balance of around $510,000 for a couple and $430,000 for singles, based on ASFAs calculations.
To arrive at these figures ASFA has assumed that people “do not retire before qualifying for the Age Pension” and that they will receive at least a part Age Pension.
A large portion of the increase in the cost of retirement was due to the rising costs of medical and hospital services, “which occurred mainly as a result of the increases in private health fund premiums effective from 1 April 2014” said ASFA.
These statistics are part of the ASFA Retirement Standard, a quarterly benchmark of the “annual budget needed by Australians to fund either a ‘comfortable’ or ‘modest’ standard of living in people’s post-work years”.
ASFA CEO Ms Pauline Vamos used the release of the statistics to argue that it is “important people understand the different pressures that their budget will face in retirement, so they can plan to save enough to fund the lifestyle they want”.
Ms Vamos also called on younger people to save more for retirement, as “every dollar you put away before age 30 could be an additional seven dollars you have in super savings when you finish working”.
What is a ‘comfortable retirement lifestyle’
ASFA defines a ‘comfortable retirement lifestyle’ to be one that provides for:
“older, healthy retiree to be involved in a broad range of leisure and recreational activities and to have a good standard of living through the purchase of such things as; household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel.”
What is a ‘modest retirement lifestyle’
For the purpose of the calculations, ASFA considers a ‘modest retirement lifestyle’ to be better than that funded by the Age Pension, but “still only able to afford fairly basic activities”.
The full statistics can be found on the ASFA website.
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