16 September 2019

The Increasing Cost of Necessities of Life for Retirees

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By Michael Rambaldini

Director | Certified Financial Planner |Aged Care Professional

Planning and preparing for retirement is of vital importance to secure a comfortable standard of living in retirement. Setting plans as soon as possible positions you at an advantage to achieve these plans for retirement security.  

But have you considered the increasing costs of living and the lower returns from investments such as term deposits?

The Australian Consumer Price Index (CPI) is designed to provide a general measure of price inflation for all Australian households.

The CPI rose 1.6% over the twelve months to June 2019.

Those who are still in the work force might not see this as an immediate concern and may not see how this affects them directly, but for retirees this is another story.

While the increase in the rate of the CPI might not look large, retirees have been facing significant increases in the price of many necessities of life. The drought has impacted the prices of a range of foods, the cost of private health insurance continues to grow at around twice the general rate of inflation, and petrol prices are up.

The costs for retirees that increased substantially over the last 12 months are:

  • Price of bread up by 4.8%
  • Price of beef up by 6.0% and lamb up by 13.5%
  • Price of milk up by 2.9%
  • Price of fruit up by 4.9%
  • Price of vegetables up by 6.2%
  • Price of beer up by 2.5%
  • Property rates up by 2.3%
  • Price of hairdressing up by 2.9%
  • Price of private health insurance up by 3.25% on average
  • Price of dental services up by 2.3%
  • Price of domestic travel up by 3.5% and price of international travel by 4.1%

Not having a regular flow of income from a salary for retirees will highlight issues such as the ability of being able to sustain the kind of lifestyle that retirees want and deserve.

Retirement is a huge milestone in life and retirees must be prepared for the increase in the costs of necessities of life. Therefore, seeking out a professional Financial Adviser whose competence and experience greatly makes a difference, is recommended.

For in-depth discussion on retirement or Financial Planning, you can reach us through www.verante.com.au

Ref: Australian Bureau of Statistics ( ABS)

The Association of Superannuation funds of Australia (ASFA)

Verante Pty Ltd is a Corporate Authorised Representative of Viridian Select Pty Ltd, ABN 41 621 447 345, AFSL 515762. This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information consider its appropriateness, having regard to your objectives, financial situation and needs.