Retirement Income
- Thread starter Terry_w
- Start date
My spending will increase in the next few years when kids get older/start secondary. But, I'm hoping by the retirement time, I'll need less income than now.
Hey Terry, l was reading one of those superannuation advice and planning etc. articles a few months ago for people hitting retirement age in 30 or so years. It was saying single people will need to consider a doubling of the accepted current minimum to survive, mostly based on inflation etc. How do you see this. Does that sound factually correct, or more speculative?
Most retirees think they will need less income but the reality is they often need more initially. Declining earning rates these days means they definately need much more capital to invest or they consume their capital base. eg at 4.0% earning rates to live on $65,000pa they need $1.6M. At 10% they only needed 650K. Nobody could have forceast this $1m gap and arguably nobody can do much about it now.
Few also consider true retirement and plan for changes to living arrangements. Our firm finds those who sell their home to fund retirement living end up damaging their pensions, accomodation bonds and often overpay aged care fees. Reality is having cash in a bank account and no home isnt wise.
Planning should be based on:
- Plan to retire : FT work - PT and when to retire full time
- Plans post retirement - travel etc
- Plans for accomodation and lifestyle
- Plans for aged care solutions - Independent living, low care through to high care.
Few also consider true retirement and plan for changes to living arrangements. Our firm finds those who sell their home to fund retirement living end up damaging their pensions, accomodation bonds and often overpay aged care fees. Reality is having cash in a bank account and no home isnt wise.
Planning should be based on:
- Plan to retire : FT work - PT and when to retire full time
- Plans post retirement - travel etc
- Plans for accomodation and lifestyle
- Plans for aged care solutions - Independent living, low care through to high care.
Actual dollar figures will need to be adjusted for inflation. I suspect Terry's poll is asking how much you'll need in today's figures.
Thanks Peter.
I am just working that out now. I am writing down everything I spend for 12 months to se if there are any surprises but I doubt it.
I'm assuming we will need less than we needed last year (when we were both working full time).
Petrol bill is so far a LOT less (hubby is retired) and I'm part time.
Travel has always been a decent amount. This year is no different. This is the only thing that will increase once we both retire. As I'm working less I keep finding more travel places.
I have until February next year booked up.
I think people think they will actuall need a lot less than they do. People who are earning $50K a year want $100K a year before they retire. Why??
I'm assuming we will need less than we needed last year (when we were both working full time).
Petrol bill is so far a LOT less (hubby is retired) and I'm part time.
Travel has always been a decent amount. This year is no different. This is the only thing that will increase once we both retire. As I'm working less I keep finding more travel places.
I have until February next year booked up. I think people think they will actuall need a lot less than they do. People who are earning $50K a year want $100K a year before they retire. Why??
I think I'll need a fair whack up until around 70 as I'm sure I'll be travelling up a storm, then that may slow down somewhat
Some good points above.
Think of all the expenses associated with going to work - transport, lunches, suits, shaving, haircuts, showering etc. once going to work stops these expenses should stop or reduce.
But, with the free time do you think you would be doing more hobbies that could cost you more? More travel, golf, sky diving etc.
On the otherhand you may start making some money from a hobby or home based business.
Think of all the expenses associated with going to work - transport, lunches, suits, shaving, haircuts, showering etc. once going to work stops these expenses should stop or reduce.
But, with the free time do you think you would be doing more hobbies that could cost you more? More travel, golf, sky diving etc.
On the otherhand you may start making some money from a hobby or home based business.
Really interesting question. Recently We have been thinking it as well. my reply would be significantly less than current expenditure. E.d. We have currently mortgage payments related to investment properties that we do not going to have in retirement.
Would be interesting to know what is recommended for the couple that wants to live comfortable life. I know that it is really difficult to say because everyone's spending habits are so different But I would appreciate even high level average. Somewhere I have got the idea that $50k (current valuation) should provide comfortable life if you own your home and you'll need $1m assets for the income. Am I completely on the wrong track.
Would be interesting to know what is recommended for the couple that wants to live comfortable life. I know that it is really difficult to say because everyone's spending habits are so different
But I would appreciate even high level average. Somewhere I have got the idea that $50k (current valuation) should provide comfortable life if you own your home and you'll need $1m assets for the income. Am I completely on the wrong track. According to ASIC a couple would need around $57,195 per year.
retiring at 65 and dying at 85 this could would need $744,000 in capital.
see https://www.moneysmart.gov.au/super...-works/super-contributions/how-much-is-enough
ASIC have a calculator so you can work it out for yourself - based on their narrow parameters. Their calculator doesn't allow you to retire before 55. It only takes into account super too.
Another good guide is
http://www.superguide.com.au/how-super-works/a-comfortable-retirement-how-much-super-is-enough
retiring at 65 and dying at 85 this could would need $744,000 in capital.
see https://www.moneysmart.gov.au/super...-works/super-contributions/how-much-is-enough
ASIC have a calculator so you can work it out for yourself - based on their narrow parameters. Their calculator doesn't allow you to retire before 55. It only takes into account super too.
Another good guide is
http://www.superguide.com.au/how-super-works/a-comfortable-retirement-how-much-super-is-enough
Actually I am not sure how much we as a couple will need. We are yet to have any kids but planning to have atleast two. Just don't know how our spendings will change once they arrive.
I reckon if we get the full time minimum wage amount for two people, that should be more than enough for a simple comfortable lifestyle. We currently earn more than that but spend less than that and invest the balance.
Edit: ASIC's 57k is slightly less than 2 x mininum wage. But that should be sufficient for us.
I reckon if we get the full time minimum wage amount for two people, that should be more than enough for a simple comfortable lifestyle. We currently earn more than that but spend less than that and invest the balance.
Edit: ASIC's 57k is slightly less than 2 x mininum wage. But that should be sufficient for us.
Seems oddly specific?
I index it using CPI against my previous goal. To me it makes more sense to define it in today's dollars rather than the dollars of yesteryear when I set myself the goal.
health care
Remember to add on a lot extra for health care. Even with top hospital private health insurance, a hip or knee replacement will leave you out of pocket about $20K in today's money. We might be very healthy in our formative years, but all that sport and exercise often leads to expensive surgery in our later years. Add a bit more for eye surgery and anything else that our grandparents didn't have because they died before these things became an issue.
Remember to add on a lot extra for health care. Even with top hospital private health insurance, a hip or knee replacement will leave you out of pocket about $20K in today's money. We might be very healthy in our formative years, but all that sport and exercise often leads to expensive surgery in our later years. Add a bit more for eye surgery and anything else that our grandparents didn't have because they died before these things became an issue.
