Cost to maintain comfortable retirement increases

Despite a near 10% fall in electricity prices in the December quarter, the Association of Superannuation Funds of Australia (ASFA) data indicates the cost of maintaining a comfortable retirement has increased further over the past 12 months.

The cost of a comfortable lifestyle rose by 1.3%, with singles aged over 65 now requiring $51,805 per year and couples needing around $73,077 per year.

However, the figures are a slight drop from six months prior in the same category for singles ($52,085) and couples ($73,337).

Meanwhile, the budget for a modest retirement remains "basically unchanged".

The higher costs for domestic holidays and vehicle insurance added to the cost of retirement in the quarter, ASFA said, but retirees have offset some of these shortfalls through strong investment returns in super in 2024.

Further, the peak industry body found that most balanced options in super have returned at least 10.5% in the calendar year, with some funds recording nearly 12%, including Colonial First State which achieved a whopping 13.8% for its FirstChoice Employer Super balanced option.

The growth also supercharged the super balance in Australia last year, where most Australians are satisfied with their super performance.

Notably, the price increase for goods and services have slowed down in the December quarter, including food prices from 3.3% increase in the September quarter to a 3% increase in the December quarter.

ASFA chief executive Mary Delahunty said inflation remains an obstacle for retirees to fund a comfortable retirement.

"While recent strong investment returns are helping retirees and those planning for retirement in achieving their desired retirement lifestyles, the most recent retirement standard budgets reinforce the fact that Australians need both compulsory superannuation and voluntary contributions which are preserved until retirement to have the sort of retirement they need and deserve," Delahunty said.