The price of retiring is actually accelerating at a faster rate than inflation. Spending categories that tend to make up a larger part of retiree spending have seen high price rises.
Inflation Hits Australian Retirees Hard: Prices Up 6.7% in Just One Year
Retired Australians are feeling the pinch of inflation more than ever, with the costs of a comfortable retirement rising 6.7 per cent for a single person and 5.6 per cent for couples over the past year. This is according to figures from the Association of Superannuation Funds of Australia (ASFA), which shows that retirees have been hit with higher prices for essential items such as fuel, healthcare and groceries.
The cost increase is larger than Australia’s CPI inflation, which rose 7 per cent for the 12 months to March 31. The latest ASFA Retirement Standard report reveals that a single retiree needs $43,901 a year to live comfortably, while couples need $61,862 annually. This means that a single retiree would need an extra $2,868 each year just to keep up with inflation – an amount that is out of reach for many on fixed incomes.
The situation is made worse by rising fees and charges associated with superannuation funds and other investments. State Street’s Global Advisors’ recent study showed that Australians worried most about inflation and minimising fees and costs when it came to their retirement planning decisions.
Challenger research also reveals that retirees are facing increasing pressure due to rising inflation, which could make life even tougher for them in the long run. With their income unable to keep up with price hikes, retirees are forced to cut back on spending or find ways to supplement their income in order to maintain their standard of living.
Experts suggest retirees should look at ways they can reduce their expenses without sacrificing too much comfort or quality of life – such as downsizing their home or taking advantage of discounts available through seniors cards or other government initiatives – as well as exploring options like part-time work or renting out rooms in their home if they are able-bodied enough to do so.
Inflation has become a major concern for Australian retirees who rely on fixed incomes and cannot keep up with rising prices. While there are some measures they can take to ease the financial burden, it is clear that more needs to be done if we want our elderly population to enjoy a comfortable retirement without worrying about money all the time.
Sources
- https://www.theaustralian.com.au/business/wealth/rising-retirement-costs-outpace-inflation-as-household-bills-bite/news-story/1c41ec920165800398dfcc73fa508565
- https://www.yourlifechoices.com.au/retirement/retirement-income/rising-inflation-may-make-life-tougher-for-australian-retirees
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