Retirement - Latest Figures For a Comfortable Retirement Increases!!
The Association of Super Funds of Australia generally provide quarterly reports on the estimates of living expenses for Australians in retirement, giving us the opportunity to establish an understanding of how much we should be looking at spending in retirement.
Of course, these figures are just averages, and each couple/person will be completely different, based on their level of living expenses, the area they live in and many other factors that come into play.
Before we jump into the figures, you must understand that you should understand your own living expenses and do a deep dive into what sort of lifestyle you would like to live in retirement before looking at the average figures.
Do you want to be travelling for three to six months a year for the next ten years?
Do you just want to be at home for the majority of the time and are okay with looking after the grandchildren?
Have you got a mansion that needs a lot of upkeep? Or a smaller unit that has body corporate fees?
Have you got pets or want pets?
Have you paid off your mortgage or are you renting?
All of these things make a massive difference to living expenses as you move through retirement, so establish the life you want to live first by sitting down and having a discussion with your partner, family or Financial Adviser about the lifestyle you want in retirement. Once you have done this, look at the numbers you will need to live on for you to retire comfortably for you!
If you did the above, great work, you have now been able to establish a personally tailored expenses plan for retirement, however if you do not have the resources or expertise to do the above, that is okay, because the ASFA have done it for us.
ASFA, 2023 [1]
As you can see, there is a decent difference in the expenses for a comfortable and modest lifestyle, so let’s delve into what the main differences are and this may give you an idea about what living expenses you can expect.
**Please note, all expenses are based on the fact that you have paid off your mortgage in retirement, therefore if you have a mortgage, you will need to add this on top of the above expenses!
Expenses Per Week in Retirement- 65-85 years old
The main differences in lifestyle comes down to the ability to go on overseas holidays, as a more modest lifestyle will spend all of their holiday expenses on travelling domestically. The other major difference is expenses on health, including medications and the like, this is due to the concessions on offer for those who earn less from their superannuation, it doesn’t mean that they may be getting less services for health, it just means they are not spending as much money on health.
We can see, overall, a comfortable lifestyle may see you travelling abroad a little bit more and using your car more, but overall, the differences in expenses per week are not astronomical.
Therefore, before you decide that you are ready to retire, or maybe you see these numbers and figure that you are not ready to retire, have a long and hard discussion to figure out what sort of lifestyle you will be living in retirement.
Do you want to spend it up a bit more and travel? Do you want to enjoy the peace and quiet in a regional town and get away from the big smoke?
All questions that only you can answer!
Therefore, I recommend sitting down and spending some time talking with a professional, such as a trusted Financial Adviser, who can give you some clarity and be a sounding board for all of your dreams and vision for retirement.
Until next time,
Take Back Control
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