Retirement cost of living surges: ASFA reveals up to 1.6% increases to retirement budgets

In this newsletter

• Feature article: Retirement cost of living on the rise: ASFA increases budgets by up to 1.6% for the quarter

• From Bec’s Desk

• Help me with my next book

• Podcast: How an entire generation cracked the game of life, working longer but stressing less: With demographer Bernard Salt

Retirement cost of living surges: ASFA reveals up to 1.6% increases to retirement budgets

There’s no real surprise to anyone living it, that the cost of living in retirement has risen for another quarter by 1.3%, well above the RBA’s target rate for inflation of 2-3 percent per annum. It’s hurting hip pockets everywhere, but moreso for single people, who are bearing the rapidly rising costs of electricity and utilities this year on only one income.

The latest ASFA Retirement Standard quarterly budgets were released today showing that a comfortable cost of living budget has gone up by 1.3 percent in the September quarter,  reaching an all-time high of $71,724. For singles, the increase is slightly higher at 1.5 percent, amounting to $50,981. This results in a 12-month rolling inflation rate for retirees at 5.5 percent, aligning closely with Australia's CPI, which stands at 5.4 percent.

And it’s not just the comfortable budget that is affected. The modest budget for retirees has also increased, with couples facing a 1.4 percent increase in their budgets to $46,620 and singles facing a budget increase of 1.6 percent, amounting to $32,417. 

The big impacts to household budgets are felt unevenly for single people because the primary price rises this quarter are in energy and utilities costs, which have escalated by 12 percent in the past year. We’ve also seen a rise in fuel prices during the September quarter of 7.2 percent,  a primary catalyst for inflationary pressures. Notably in the September quarter, insurance costs have continued to  outpace other cost of living expenses, surging by 2.8 percent. Telecommunications companies have increased charges by 1.9 percent, and postal services have experienced a notable 8.2 percent hike, attributed to elevated fuel costs being transferred to consumers. No doubt there is more flow through of the fuel price to come. 

Electricity expenses have witnessed a rapid ascent, registering a 4.2 percent increase in the September quarter. For those ineligible for government rebates aimed at pensioners and seniors concession cardholders, the impact is even more pronounced. Over the year, electricity costs have surged by a staggering 18.6 percent, excluding any rebates, imposing a significant burden on people as they navigate a challenging economic landscape.

Other basic costs of living appear to be slowing nicely in the September quarter, with only marginal increases to the cost of food (+0.6%), clothing (+0.4%), healthcare (+0.1%) and leisure activities (+0.2%).

Here’s the latest ASFA budget amounts. They’re a helpful guide to benchmark against if you want to look for opportunities to trim your cost of living.

ASFA Retirement Standard budget for September 2023 quarter, released 29 November 2023

There’s a lot going on in the industry of retirement right now. Your superannuation funds are under enormous pressure from regulators to provide pre-retirees with more help and support as you navigate retirement. Some are stepping up, and others are still trying to work out what to do. And for those of you trying to step towards this phase of change, you’re becoming more curious about your choices. If this is you then look to your funds and see what they are offering. Many are offering you a whole lot of free or very low cost financial advice services that they don’t always promote well, along with a few good calculators and planning tools. Become hungry to learn. Use the tools and advice - and layer the information into your life. You can always add independent financial advice on top, when you’ve learned a whole lot of stuff for free from your fund.

I dont think retirement should be a mystery to you, but you also need to realise that all your questions can rarely just be answered in one go. Navigating your retirement years is like having your first child. You are going to spend years trying to figure out what the changes mean, and over time, you will figure it out your own way. You’ll need to talk to lots of people experts and not-so-experts, read lots of advice, and disregard a lot of opinions too. That’s completely normal - so start rolling around in it - you might just be surprised what you learn.

Now, let’s talk about my article in the Sydney Morning Herald and The Age, last weekend. It created quite a #### storm, with lots of emails pouring in about how irresponsible I am teaching people about ‘the sweet spot’. Gosh. It’s tough to sit in my chair where so many people approaching retirement need insight into how to bring a relatively small super balance together with the pension to make ends meet. And how well it can do the job. At the same time, many people here are self-funded retirees who have worked and saved hard for decades and are in a good position, but have to do it all themselves and they’re frustrated no doubt that these sweet spots exist and worried too many people will blow the lot on my insights. No, I don’t want everyone to go out and blow all their retirement savings frivolously because they read one newspaper article. But I do want them to understand the systems of retirement and how to live their best possible life. To learn about their choices!

All I can say, is that in 800 words in the newspaper I can only tackle one part of retirement systems at a time. I can’t give comprehensive insight that takes in drawdown rates, taper rates and tackles super balances and the aged pension in one go. So never assume what I am telling you is comprehensive enough to deploy without more personal advice from a qualified financial planner. I’m trying to give you tastes of the ways you can USE the systems to your benefit, to have an epic retirement. And everyone deserves to have an epic retirement - not just the wealthy. Want to know what all the fuss is about - read it here: “The sweet spot: how to earn more while having less in retirement”. Put a comment on this newsletter here if you want to discuss it as the SMH has comments turned off - probably for good reason. Or email me - I have thick skin. I love your feedback - that’s how I know we’re all alive and reading ☺️.

This week it’s getting dangerously close to Christmas - yep - 4 weeks to go. I’m waving one child off for Canada in just a few days to become a ski teacher for the season - a sad (for me) and wildly exciting part of her growing up. And I’m contemplating the fun of the summer months ahead, with only some simple camping booked, knowing I have another book to knuckle down and write, during the quieter months of December and January (more on that below). And that the Epic Retirement course is almost ready, and will be launched in 2024. It’s so cool! Register your interest here.

I’m absolutely loving your letters. Thanks for so many nice words about the book, the podcast and the column. It really is great to know you’re reading and listening to all of it, and moreso - that it’s helping you. If you want to write, just reply to this email.

The most delicious thing I can ask of you is that - if it helps you, consider buying a copy for a friend for Christmas. You can order it here. Or sending this email on and telling someone about what I do.

Many thanks! Bec Wilson

Author, podcast host, columnist, retirement educator, and guest speaker

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Get involved in my next book - help me write it

Over the next 3-5 months I’m writing my second book, and this one is broader than How to Have an Epic Retirement. For this book I am starting to ‘talk to people’, particularly those who are in their 50s and 60s, about their attitude to this stage of life, what is going on for them, what they are really worried about, and what they want answers to. It might not be about retirement so specifically, but planning for this new phase of life where we don’t really ever retire (other than to ‘access our Super’). I’d like to invite you to be a part of my insight gathering. Please, if you would be keen to have a chat, fill out this form and I will call you personally for an interview. There’s nothing like a book built from real, at-the-coal-face insights.

Podcast: How an entire generation cracked the game of life, working longer but stressing less: With demographer Bernard Salt

It’s episode six of Prime Time, and this week I chat with Bernard Salt, world renowned demographer and social commentator about how our generation is doing pre-retirement and retirement differently. Bernard Salt probably knows more about the pre-retirement and 'lifestyle years' than anyone in the country. He's dedicated his career to studying this age group and how we are changing the way we live, work, buy, spend and sell. And it’s great to hear him talk about us so candidly - and how we’ll all probably be working longer, but doing less.

Listen now

LISTEN HERE - LATEST EDITION (S1E6) - OMNY or listen on APPLE PODCASTS or SPOTIFY PODCASTS

Don’t forget - you can buy How to Have an Epic Retirement wherever you get good books. Big W, Target, David Jones, Dymocks, QBD, major airports, and many many booksellers. If your smaller bookstore doesn’t have it in stock, ask them to get you one in. It won’t take them long.

I also sell them on my website, and you can order one with a custom inscription handwritten by me! Yep really! Order here.

How to Have an Epic Retirement is the ultimate guidebook for modern retirees. It is grounded in my own widespread research on modern retirement, and draws on my prior ten years as the CEO of Starts at 60 and Travel at 60 (before I stepped away to pursue my next career in retirement education). It also draws on the work of the leading thinkers in the longevity, health, happiness, purpose and modern ageing spaces and incorporates many interviews with people who have navigated the sometimes challenging path into retirement.