ASFA unveils new standard for older retirees


By Krystine Lumanta

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The Association of Superannuation Funds of Australia (ASFA) has provided a clearer picture of the spending magnitude and behaviour of Australians aged 90 to 95 with the release of its Retirement Standard for Older Retirees yesterday.

The existing ASFA Retirement Standard focuses on the spending requirements of those aged around 70, who were in relatively good health for their age and who resided in their owner-occupied home.

However, as people aged, their spending requirements changed as they were unable to engage in the same types of activities and often needed care and support, the superannuation industry peak body said.

This had different cost implications, which was why a new standard needed to be developed, ASFA chief executive Pauline Vamos said.

“As average life expectancies continue to increase, most older Australians will require both superannuation savings and financial support from government to accommodate their long-term retirement spending needs,” Vamos said.

“This will pose challenges for governments as they seek to put in place policies that provide financial support to this group, while working with the fiscal challenges that will arise as a result of the pool of retirees growing and the number of working Australians declining.”

The standard would allow government to better analyse the impact policy changes or price fluctuations in particular areas would have on that cohort of retirees and make better decisions accordingly, she said.

The information would also help individuals and their financial advisers with their own retirement planning, as they would be able to see how their spending would change in their later years and plan to accommodate that, she said.

The new standard was released as part of a report, “The spending patterns of older retirees”, which also found older retirees spent less in aggregate than younger retirees due to a decrease in holidays and other leisure activities outside the home, most likely reflecting their reduced capacity for activity.

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