Why retiring comfortably just got more expensive

For millions of older Australians dreaming of a peaceful and dignified retirement, that goal is becoming harder—and more expensive—to attain.

New figures released by the Association of Superannuation Funds of Australia (ASFA) show the cost of a comfortable retirement rose by 1.6 per cent over the past year, with retirees now needing $73,875 a year for couples and $52,383 for singles to maintain what ASFA defines as a “comfortable” lifestyle.

ASFA CEO Mary Delahunty said while retirees are getting some relief from slowing inflation, the cost of essentials remains a concern.

“Australians in retirement are starting to benefit from a slowdown in inflation, but the prices of essentials are still rising,” she said.

The data paints a stark picture of what retirees are facing. Over the past year:

• Fruit and vegetable prices surged 6.6 per cent.
• Meat and seafood rose 4.3 per cent, and
• Electricity costs spiked in the March quarter, driven by the end of state-based subsidies and delays in Commonwealth support.

The rise in the cost of essentials is particularly concerning, as a recent report reveals that many retirees are already facing financial stress, with the Age Pension no longer enough to cover even their basic needs.

This alarming trend came to light in the latest Cost of Living Longer Report 2024, commissioned by Australian Seniors in partnership with research group MyMavins.

The study surveyed over 1,000 Australians aged 50 and above, revealing the impact of inflation and rising costs on those relying on the age pension.

Alarmingly, the study found that nearly three in five (58 per cent) are facing moderate to severe financial challenges due to rising costs, with one in 10 (10 per cent) experiencing severe difficulties.

With the cost of living continuing to climb, seven in 10 (69 per cent) now fear that the age pension alone will not be enough to live on.

The financial strain has left nearly three in five (59 per cent) struggling to pay for essentials such as utilities and groceries.

Even more concerning, one in five (20 per cent) have delayed or forgone medical treatment due to costs, placing their health at risk.

Understandably, these difficulties are taking an emotional toll, with around two in five (43 per cent) reporting a decline in their quality of life over the past two years. For 21 per cent, this decline has been considerable or severe.