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COST OF LIVING IN RETIREMENT
By Karen Maher
Since 2004, the ASFA Retirement Standard has provided a guide to the expenses for both a comfortable and modest lifestyle for couples and singles to maintain a healthy, vital and connected lifestyle in retirement. Updated quarterly to reflect inflation and regularly reviewed for lifestyle changes, the Retirement Standard provides detailed budgets of what they estimate single individuals and couples need to spend to support their chosen lifestyles.
A comfortable lifestyle is defined as allowing retirees to maintain a good standard of living, encompassing a broad range of leisure and recreational activities. This includes purchasing household goods, private health insurance, a reliable car, quality clothing, various electronic devices, an annual domestic trip, and an international trip every seven years.
A modest lifestyle is defined as a lifestyle slightly above the Age Pension, i.e. only allowing for the basics. Both budget models assume that retirees own their homes outright and are in relatively good health.
The latest update for the March quarter of 2024 indicates that couples aged 65 to 84 living a comfortable retirement need to spend a minimum of $72,663 per year, and singles $51,630 per year. These figures represent a record high, with a of 0.7% increase on the previous quarter and a 3.3% increase over the year to March 2024.
The most significant price changes were in medical and hospital services, which rose 2.3% quarterly, and insurance, which increased by 3.7% from the December quarter and 16.4% annually.
Table: Budgets for various households and living standards for those aged 65 to 84 (March quarter 2024, national)
| Household Type | Single Modest | Couple Modest | Single Comfortable | Couple Comfortable |
| Housing – ongoing only | $119.81 | $135.28 | $140.98 | $147.18 |
| Energy | $39.99 | $53.71 | $50.66 | $62.83 |
| Food | $110.64 | $205.13 | $143.05 | $248.64 |
| Clothing | $20.92 | $39.76 | $27.95 | $52.04 |
| Household goods & services | $39.58 | $46.56 | $85.87 | $106.50 |
| Health | $57.01 | $110.20 | $115.84 | $216.77 |
| Transport | $110.23 | $117.40 | $180.11 | $195.08 |
| Leisure | $114.13 | $179.20 | $221.80 | $333.27 |
| Communications | $18.25 | $20.55 | $22.82 | $29.70 |
| Total per week | $630.55 | $907.80 | $989.07 | $1,392.01 |
| Total per year | $32,915.00 | $47,387.00 | $51,630.00 | $72,663.00 |
The AFSA Retirement Standard is a valuable guide for estimating the cost of living in retirement for both comfortable and modest lifestyles.
While many aspire to a comfortable lifestyle that includes annual domestic travel and occasional international trips, it’s important to recognise that personal preferences and the desire for a more active lifestyle may require an income exceeding $72,663 per year.
Karen Maher
Associate
If you have any questions or comments, please email me at karen@gfmwealth.com.au
Disclaimer: This document is not an offer or invitation to any person to buy or sell any interest in or deposit funds with any institution. The information here is of a generic nature, and does not take into account your investment objectives or financial needs. No person should act upon this information without firstly seeking competent, professional advice specifically relating to their own particular situation.
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