With the rising cost of living continuing to soar and inflation sitting at a high of 7.3 per cent, it’s no secret that Australians are doing it tough.
As global factors add to the pressure, we’ve seen grocery, gas, and energy prices skyrocket to match inflation, and those in their golden years have seen the bar for a comfortable retirement raised.
According to the Association of Superannuation Funds of Australia (ASFA), comfortable retirement for senior Australians has risen by 1.9 per cent, as those over 65 now need to spend $68,014 per year for couples, and $48,266 for singles.
MEDIA RELEASE: Australian retirees face increased cost of living driven by global factors, but super is buffering the impact https://t.co/wtsRBRg9MH pic.twitter.com/R3TxrwXQYL
— ASFA (@asfaAUST) November 16, 2022
ASFA’s latest retirement standards reflect the increase seen to fruit and vegetables prices, up by 16.2%, dairy products up by 12.1%, imported inflation saw oils and fats up 19.3%, coffee up 10.7% and gas 16.6% and automotive fuel 18.0%.
Data released by the Australian Bureau of Statistics (ABS) in March 2022, indicated that older Australians are already suffering the most from the rising cost of living with pensioners experiencing an annual household living cost of 4.9 per cent.
Head of Prices Statistics at the ABS Michelle Marquardt said the main culprit affecting older Australians is the increase in grocery prices, but household costs also played a large role.
“These households were also more affected by increases in housing costs, as they have relatively higher expenditure levels on utilities, maintenance and repair, and property rates,” Marquardt said.
However, ASFA Deputy CEO, Glen McCrea said that Australian seniors are better off than their counterparts across the globe, saying superannuation has acted as a buffer for the rising inflation.
“The global energy crisis, raw material scarcity, and supply chain disruptions caused by ongoing COVID lockdowns in China are converging to pose significant inflationary challenges globally and here at home,” McCrea said.
“We can take some solace from the fact that the investment we’ve made in superannuation over the last three decades is acting as a buffer in the face of these strong headwinds.
“Governments in Europe and the UK are actively considering raising the retirement age or slashing the amount of pension retirees receive as they struggle to deal with the global economic challenges they are facing.
“In contrast, the Age Pension remains affordable for the Government in Australia where, in aggregate, retirees on average have larger private retirement savings balances than in most countries in the world. This helps cover costs during tougher times, providing a brighter outlook for Australian retirees than is the case for their international counterparts.”
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