Back to Listing

ASFA Retirement Standard: new calculator; updated figures

12 September 2011

The updated figures were released as the Association of Superannuation Funds of Australia (ASFA) launched its new retirement expenditure calculator.

The ASFA Retirement Standard Calculator allows people to find out how much they would need to spend in retirement for the lifestyle they desire, depending on their domestic arrangements and which state or territory they live in.
\"This is a really simple tool for people to quickly calculate indicative costs for their retirement,\" said ASFA chief executive officer, Pauline Vamos.

The calculator, created by Rice Warner, will be updated quarterly in-line with the ASFA Retirement Standard quarterly updates.

The lump sums needed at retirement for a modest lifestyle are relatively small, being $50,000 for a single and $35,000 for a couple as the required expenditures are mostly met by the Age Pension of $19,522 for a single and $29,434 for a couple (including pension supplements).

For a comfortable lifestyle, assuming part receipt of the Age Pension, the lump sum figures required are considerably more; $430,000 for a single and $510,000 for a couple.

The ASFA Retirement Standard shows the aggregate costs for a couple living comfortably in retirement were up by 0.7 per cent in the June quarter 2011 from the March quarter 2011.

The cost of food, fuel, and pharmaceuticals rose strongly over the quarter while the price of audio, visual and computing equipment and overseas travel fell.
The increase in costs over the quarter for retirees was slightly lower than the 0.9 per cent increase in the All Groups Consumer Price Index (CPI).

The largest increase in prices was recorded in Perth followed by Canberra. The lowest increase was in Melbourne.
Retiree households on average have somewhat different spending patterns to the rest of the population.
Along with generally owning their own home outright (so cost increases for housing are less important for retirees), they don't tend to spend much on education services.

In contrast, food, health, transportation and recreation spending form a large part of retiree budgets.
However, especially over the longer term, it is not unusual for the effects of the various differences to largely cancel out.

Budgets for various households and living standards (June quarter 2011)

 

Modest lifestyle - single

Modest lifestyle - couple

Comfortable lifestyle - single

Comfortable lifestyle - couple

Housing - ongoing only

$56.91

$54.63

$65.96

$76.46

Energy

$31.71

$42.11

$32.18

$43.64

Food

$75.93

$157.28

$108.47

$195.24

Clothing

$17.92

$29.09

$38.79

$58.18

Household goods and services

$26.00

$35.25

$73.13

$85.67

Health

$35.10

$67.75

$69.65

$122.92

Transport

$92.10

$94.71

$137.25

$139.86

Leisure

$72.18

$107.53

$218.72

$299.73

Communications

$9.21

$16.12

$25.30

$32.21

Total per week

$417.05

$604.47

$769.44

$1,053.91

Total per year

$21,746

$31,519

$40,121

$54,954

The figures in each case assume that the retiree(s) own their own home and relate to expenditure by the household. This can be greater than household income after income tax where there is a drawdown on capital over the period of retirement. Single calculations are based on female figures. All calculations are weekly, unless otherwise stated.

Between the March quarter 2011 and the June quarter 2011, retirees faced a 1.4 per cent increase in the cost of food, and over the year to the June quarter the increase was 6.1 per cent.

A significant contributor to the rise in the cost of food in the quarter was the increase in the price of fruit due to seasonal factors and adverse conditions in some growing areas, with an increase of 26.9 per cent. The price of vegetables fell by 10.3 per cent. The cost of bananas increased nearly four-fold over the six months to June 2011 due to shortages created by Cyclone Yasi.

Also between the March and June quarters was a two per cent increase in the cost of health services (largely due to an increase in private health insurance premiums that took effect from 1 April).

There was a 1.2 per cent increase in transportation costs with a four per cent increase in petrol prices. Motor vehicles recorded a small fall in prices.

The prices of leisure goods and services fell by 0.6 per cent between the quarters, mainly due to decreases in the prices of audio and visual equipment and in the prices of both domestic and overseas holiday travel and accommodation.

About the ASFA Retirement Standard
The ASFA Retirement Standard, formerly the Westpac-ASFA Retirement Standard, is now an independent initiative by the Association of Superannuation Funds of Australia (ASFA) benchmarking the annual budget needed by Australians to fund either a comfortable or modest standard of living in the post-work years.

It is updated quarterly to reflect inflation and provides detailed budgets of what singles and couples would need to spend to support their chosen lifestyle.

Modest lifestyle in retirement
Better than the Age Pension, but still only able to afford fairly basic activities.

Comfortable retirement lifestyle
Enabling an older, healthy retiree to be involved in a broad range of leisure and recreational activities and to have a good standard of living through the purchase of such things as; household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel.

More information
Costs and summary figures can be accessed via the ASFA website.

Share