Some retirees are doing well despite cost-of-living pressures – usually those who have multiple income streams and are willing to monitor and adjust their spending priorities.
They have benefited from some positive financial factors, including higher returns on their bank deposits, rising home values and stock prices, inflation-linked retirement pension increases and good news in the recent federal budget.
The ASFA findings coincide with research from CommBank iQ which found that people aged 60 and over are increasing their discretionary spending, which increased 11% for travel, 9% for retail in general and 7% for meals away from home.
The director of MBA Financial Strategists, Darren James, said this The Australian many retirees find themselves “in a unique situation right now.”
“Recent interest rate increases have had no impact on most retirees because their mortgages have largely been paid off. But on the other hand, most retirees tend to have savings through term deposits, and they are currently getting higher interest rates than they have in a long time,” he said.
Retirees have also benefited recently federal budget keeping pension assessment rates at their current low level, where pension income tests deem the first $60,400 of a person’s financial assets to earn just 0.25%, and assets above this threshold are deemed to earn only 2.25% – well below typical investment returns.
The budget’s $300 in energy aid to all families was good news for all pensioners, not just those receiving old-age pensions.
ASFA says last year’s energy bill discounts caused energy prices to rise 2% annually instead of the 17% they would have risen without government assistance. He says many self-funded retirees were not eligible for those 2023 discounts.
Related reading: ASFA, The Australian
