As the rising cost of living continues to place increased pressure on all Australians, seniors have been dealt a devastating blow with the latest findings from the Association of Super Funds of Australia (ASFA) revealing that retirees will now need to spend more in order to retire “comfortably”.
The ASFA Retirement Standard June quarter 2022 figures, released on Thursday, August 18, found couples aged around 65 need to spend $66,725 per year to enjoy a comfortable lifestyle in retirement while singles would be met with an annual cost of $47,383.
These figures indicate a jump of 2.0 per cent for couples and 1.9 per cent rise for singles from the previous quarter.
ASFA Deputy CEO, Glen McCrea pointed to the “ever increasing health costs” that retirees are faced with as a major contributor to the increased cost of retirement.
“While there is considerable subsidisation of health costs and benefits being paid from private health insurance, out of pocket expenses remain substantial for items such as dental treatment, optical expenses, and gap payments for procedures in hospitals,” McCrea said.
“Private health insurance premiums rose on average by 2.7 % from 1 April with some major insurers increasing premiums by more than 3%.
“However, other insurers have postponed premium increases until later in the year.”
Concerns for increasing health costs are growing as doctors warn that Australia’s vulnerable are being left in the lurch as the bulk-billing system nears collapse with many general practitioners closing their doors due to rising costs and unsustainable wages.
The medical community has called for urgent help as they’re forced to charge gap fees, creating concerns for patients who will no longer have access to affordable basic healthcare.
Health and Aged Care Minister Mark Butler recently revealed that “the average out-of-pocket cost for GP services has risen 60% per cent over the past decade”.
“Our health system is under pressure, our doctors need support, and we need to reduce pressure on hospitals,” he said.
Costs associated with healthcare aren’t the only expenses impacting retirees with increases in non-discretionary items such as groceries and fuel hitting seniors’ hip pockets.
The price of fuel has shot up 32.1 per cent over the last year while vegetables and beef have seen increases of 14.6 per cent and 9.4 per cent respectively. Even a daily cup of tea has been impacted with a 9.3 per cent price hike on coffee and tea products.
Despite all the doom and gloom, McCrea remains hopeful that although retirees are doing it tough the benefits of compulsory superannuation are helping seniors boost their retirement income.
“Despite the challenges of recent years, superannuation continues to achieve its objective of materially lifting the standard of living of older Australians and allowing more retirees to achieve the dignity they deserve in retirement,” McCrea said.