Association chief executive Pauline Vamos said this rising cost of living shows just how important it is to save as much superannuation as possible.

“When you are no longer relying on a wage or salary, even small increases in the cost of living can hit hard, particularly when non-discretionary items such as food or medicines are affected.

“The best way to shield yourself against increasing costs is to save as much money as you can while you are working. This will give you the financial freedom to live the lifestyle you want in retirement,” she said.

According to ASFA’s recent report, couples wanting to live a 'comfortable' retirement will need to spend $58,326 per year, up 0.3 per cent on the previous quarter. This would require a joint superannuation balance of around $510,000 to achieve this.

Singles seeking a 'comfortable' retirement will now need to spend $42,597 a year, an increase of 0.4 per cent from the previous quarter, and require a super balance of around $430,000.

The report indicated prices rises for fruit, up 14.7 per cent, and property rates and charges, up 6.3 per cent, contributed heavily to the overall cost of living.

Meanwhile, analysis conducted by Towers Watson suggests Australians will need to combine lower spending strategies and the right investment options to ensure their income lasts for an increasingly likely period of 25 years in retirement.

Andrew Boal, managing director for Towers Watson in Australia, said lower levels of spending, particularly in the early years of retirement, must be implemented alongside an appropriate investment strategy to retain flexibility and reduce longevity risk.

“When considering investing for financial success in retirement, there are several factors that come into play, including how much superannuation a saver has available at the start of retirement, their spending plans, the amount of any other savings they have, as well as their risk tolerance and preferences,” he said.

“An individual’s spending strategy, however, is one of the biggest factors that will determine whether or not they will achieve financial success in retirement,” said Mr Boal.