Australia’s Superannuation Costs Rise : Australia’s leading superannuation industry body has outlined the amount required for a comfortable retirement, as seniors experience a slight and temporary reduction in retirement expenses.
A recent decline in petrol and electricity prices has led to a 0.5% decrease in retirement costs this quarter, giving retirees a bit of extra financial flexibility during the holiday season.
“The short-term easing of retirement budget pressures is a timely holiday gift for retirees,” said Mary Delahunty, CEO of the Association of Superannuation Funds of Australia (ASFA).
Despite the temporary relief, ASFA data reveals that the cost of retirement has risen substantially over the past two decades.
In 2004, a single person aged 65 required only $31,797 annually for a comfortable retirement, while a couple needed $41,394 per year.
Fast forward twenty years, and ASFA now reports that a single 65-year-old would need $51,814 per year to live comfortably, with couples requiring $73,031 annually.
This means that a couple retiring at 67 would need $690,000 in their superannuation, while a single retiree would require $595,000.
These figures are based on the assumption that the retiree has top-tier health insurance, dines out occasionally, and takes one domestic holiday per year. Additionally, it assumes that the couple or individual owns their own home.
Australia’s Retirement Costs Rise: How Much You Need for a Comfortable Future
Delahunty noted that currently, only about 30 percent of retirees have enough in their superannuation to support a comfortable lifestyle.
However, this is expected to rise to 50 percent as the superannuation guarantee rate increases to 12 percent on 1 July 2025.
She emphasized that the cost of living is particularly high for seniors, especially for essential items they cannot do without.
“Over the past 20 years, even modest retirement budgets have surged, with significant increases in costs like health insurance, energy bills, and groceries,” she explained. “These essential expenses are where retirees are feeling the most pressure.
Slight Relief for Retirees as Petrol and Electricity Prices Drop; However, Long-Term Retirement Costs Continue to Increase
Over the past two decades, electricity prices have soared by 150%, while water and sewerage costs have risen by 161%. Gas prices have increased by 122%, and petrol by 113%.
Medical and hospital fees have gone up by 112%, while property rates have jumped by 106%. Insurance costs have also risen by 99%.
9News Money Editor Effie Zahos has offered some advice for Australians whose superannuation may fall short of expectations.
To boost your super, she suggests reviewing your investment options and ensuring you’re not paying excessive fees. Additionally, there’s a government co-contribution scheme that could add up to $500 to your super each financial year, provided you’re eligible.
To receive the full $500 contribution, you must earn $45,500 or less and contribute $1,000 from your take-home pay to your super.
Other suggestions include joining cashback sites that allow you to direct rewards into your superannuation.
For those approaching retirement, the age pension can provide an additional boost to your super income.
You can also seek assistance from a Services Australia Financial Information Service Officer for guidance.
Please note, the information provided on this website is general in nature and does not constitute personal financial advice. It has been prepared without considering your individual objectives, financial situation, or needs. Before acting on any information provided, you should evaluate its suitability based on your personal goals, financial situation, and needs.
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