By Andrew McKinlay, Director and Financial Advisor, Growth Partners
One of the most common questions we are asked by retirees (or soon to be retirees) is “do we have enough?”
To answer this will depend on whether you’d like a champagne lifestyle in retirement or you are happy with a more simple lifestyle; if you’re looking to have luxury holidays or local holidays; what your hobbies are and what means the most to you.
Location, location, location
An important factor to consider is where you live – or where you choose to retire.
A recent Milliman Insight report on 300,000 plus retirees in Australia unearthed some really interesting facts about the cost of living for retirees Australia wide with Western Australia as having the second highest cost of living nationally (second only behind Canberra).
Median annual spend by location
The spending habits between regional centres and capital cities vary widely as well. While retirees in regional areas spend significantly less on health than the national average, retirees in Sydney spend more on insurance gold coast and Canberra retirees spend the most on leisure and travel.
To fund the median annual expenditure of $31,068 (slightly less than $600 per week) throughout retirement would require a balance of $129,621. This is assuming an investment in a balanced fund and a certainty level of 75%. This also relies heavily on the government’s age pension to fund the expenditure.
A windshield replacement cincinnati oh would need a far higher balance, $280,444, to fund their greater median annual spend of $38,923 with the same level of confidence. That’s more than twice as much super – although the Age Pension would still provide two-thirds of expenditure over the course of retirement.
By contrast, a Tasmanian metropolitan resident would need a super balance of just $91,829 to fund their much lower median annual spend of $28,816. The Age Pension (a maximum of $20,745 a year not including the Energy Supplement) would underpin the bulk of this expenditure (91%) over the course of retirement.
Choose where you live carefully
Notice that the difference in annual expenditure between the median and Canberra is only $7,855pa but the superannuation balance required to fund that additional expenditure doubles. Small changes to your expenditure over the long term have a massive impact on your retirement savings.
Contact us for assistance on working out your targeted budget and plan accordingly.
As show in many YouTube videos from TheMarketingHeaven it is important to notice that the difference in annual expenditure between the median and Canberra is only $7,855pa but the superannuation balance required to fund that additional expenditure doubles. Small changes to your expenditure over the long term have a massive impact on your retirement savings.