Retirees now need nearly $50,000 per year to live comfortably

quoll

quoll

news article

"Inflation for a couple living comfortably in retirement rose 1.1 per cent during the March quarter, new figures released for the Westpac ASFA Retirement Standard show.

They would need to spend $49,502 a year to maintain their lifestyle, up from 0.6 per cent in the December quarter.

Couples with a more modest lifestyle need $26,851 a year, a 1.2 per cent rise, up from 0.9 per cent in the December quarter."

And I thought aiming for $100k per year in todays $$ for retirement was very excessive, now I find it's only double what comfortable couple need. Might need to re-evaluate what is required to have a well off retirement income.

Food for thought, it's a matter of matching desire activity level with income. Actually with the cost of food and medical treatment going up might need $150k in todays dollars.

cheers
Graeme
 
$50k per year - got to be joking.

Couples with a more modest lifestyle need $26,851 a year,
Click to expand...

Ah, that sounds a little more realistic (assuming own a PPOR).... Doesn't make as good headlines though!
 
Depends what lifetsyle you want. If your use to going out to dinner a couple of times a week, have golf club memships, have other hobbies you need far more than that.
My parents would earn 100k+ split between the 2 of them and there's not much saving going on (nor should there be). They have a great life - who would want to slum round on 50kPA if you had a choice.
pieman
 
Well in today's dollars
$100pw for groceries = $5200py
$70pw for fuel = $3640py
$1000py for car insurance and rego (1 car)
$1000py for car maintenance
$50pw health insurance = $2600py
$1000pq for utilities (gas,electricity,phone) = $4000py
$1000py rates
$100pw for outings/presents for grandkids/whatever = $5200py

I'm sure I've left things off but thats a pretty basic living

=~$24,000py


add a few niceties
1 x 30 day holiday o/seas = $20,000py
upgrade car every second year = $10,000py

All of a sudden we're up to ~$54,000py

I'm a bit surprised actually, I thought it would be quite a bit more than that
 
pieman said:
who would want to slum round on 50kPA if you had a choice.
Click to expand...

Not everyone equates having a huge income as being necessary. There are people out there that can (and do) live very very well on 50K or less. Not everyone needs or desires a materialistic lifestyle.

Mark
 
shady said:
Well in today's dollars
$100pw for groceries = $5200py
$70pw for fuel = $3640py
$1000py for car insurance and rego (1 car)
$1000py for car maintenance
$50pw health insurance = $2600py
$1000pq for utilities (gas,electricity,phone) = $4000py
$1000py rates
$100pw for outings/presents for grandkids/whatever = $5200py

I'm sure I've left things off but thats a pretty basic living

=~$24,000py


add a few niceties
1 x 30 day holiday o/seas = $20,000py
upgrade car every second year = $10,000py

All of a sudden we're up to ~$54,000py

I'm a bit surprised actually, I thought it would be quite a bit more than that
Click to expand...

I don't know where you're getting your figures from, but some of those are excessive to the extreme. For example, I don't know any retirees that are replacing their car every two years and if you're paying $1,000 a quarter for utilities, then you need to find a new electricity and phone provider. I pay maybe $1,000 a year for mine. Also, who in the hell is spending $100 a week on their grandchildren?

You reckon all those things are basics!

I live (what I consider) a reasonably comfortable lifestyle on about $22,000 a year. Note that figure doesn't include my mortgage or investment loans, that's purely for discretionary spending. This includes: groceries, going out, couple of holidays a year, utilities, buying records, rates, etc. However, I don't own a car or a mobile, so I don't have those expenses.

That $22,000 is at the top of the scale - I set aside a certain amount each month for these things and always come out a few hundred dollars up. It's not that I don't want an expensive lifestyle (which I don't), it's because I'm happy living a simple life with very few wants. It's the way I've always been. Give me an internet connection and a stack of records and I'm happy.

A few years ago, I sat down and really stripped back to the bare bones what I needed to live on post-financial freedom (thanks Duncan for the inspiration). As a result, I cut my desired income by more than half. What that translates to is that I'll be financially free several years earlier. I know a lot of people on here want extravagant lifestyles and huge incomes, which is fine. I just hope the extra 10+ years you have to work to achieve that is worth it. I'd rather have a much smaller income, more basic lifestyle and the freedom to do whatever I want much earlier.

That doesn't mean I won't build on my assets to slowly increase my income. But the way I see it, I've taken back the one thing that cannot be replaced - ever - once it is gone. Time. I hope those shiny trinkets people drool over make it worth giving up all that priceless time for.

Mark
 
thrashoholic said:
I don't know where you're getting your figures from, but some of those are excessive to the extreme. For example, I don't know any retirees that are replacing their car every two years and if you're paying $1,000 a quarter for utilities, then you need to find a new electricity and phone provider. I pay maybe $1,000 a year for mine. Also, who in the hell is spending $100 a week on their grandchildren?
Mark
Click to expand...


I got the utilities from
$500-$600pq electricity, That's usually what mine is but my wife runs the air cond 24/7 and always leaves every friggin light in the house on.
$300pq phone
$150pq Gas

So thats about $1000pq

And if you would like to re-read what I suggested "$100pw for outings/presents for grandkids/whatever"

One night out for 2 is easily $100
A trip to movies for 2 is $50 with drinks and popcorn
Taking the grandkids to the zoo is more than $100
Anything else you might like to do

And the replacing a car every 2 years was an extra 'niceties' that some do. I know my old man has bought new car every two years for the last 30 odd that I can remember.
 
A couple of things to consider.

Many people will still be supporting children at retirement age.

Medical costs and need for services often go up as you age. (my grandma needed to pay some-one to cut her toe nails for example and began taking taxis as she could no longer drive)

With more leisure time many want more money to allow them to travel, follow their passions etc.

Not all retirees own their own home. Many will be paying rent or paying for care in a nursing home which is far from cheap if you want a reasonable level of care.
 
thrashoholic said:
I live (what I consider) a reasonably comfortable lifestyle on about $22,000 a year. Note that figure doesn't include my mortgage or investment loans, that's purely for discretionary spending. This includes: groceries, going out, couple of holidays a year, utilities, buying records, rates, etc. However, I don't own a car or a mobile, so I don't have those expenses.

That $22,000 is at the top of the scale - I set aside a certain amount each month for these things and always come out a few hundred dollars up. It's not that I don't want an expensive lifestyle (which I don't), it's because I'm happy living a simple life with very few wants. It's the way I've always been. Give me an internet connection and a stack of records and I'm happy.
Click to expand...

Well it seems that your living on what I had thought of anyway.
I suggested ~$24k for life necessities
 
I think the $50k mark is about right if you want to go caravaning / holdiay / eat out a few times, the $24k is going to be a really basic lifestyle.

Really feel sorry for those that have relied on super and not thought about how much they will have but have just assumed it will be alright, they will retire with $250k of super and expect to have the $50k lifestyle but most will live for more than 5 years, so something has to give. Probably the spending.

Makes you realise how important planning is.

Regards
Graeme
 
this as all assuming there's no margin call on your reverse mortgage as well.

or the fact that you HAVE a mortgage still - or rent - or pay fees to be part of an over55s community....
 
I read that the single pension is now ± $ 14,300 p.a. Couples is probably ± 19K.

I'm assured the vast majority of retired people are existing on this amount.

Don't know what the definition of "comfortable" is, but it's about 3.5x what the vast majority of folks are currently on.
 
thrashoholic said:
Not everyone equates having a huge income as being necessary. There are people out there that can (and do) live very very well on 50K or less. Not everyone needs or desires a materialistic lifestyle.

Mark
Click to expand...

good luck to them I say, each to their own and all that but I'd rather have a few bob to throw round and enjoy my retirement.
Why not if you can;)

Look if I get there and I dont like having my 150k PA (indexed) Im sure there are plenty of worthy chariites that I can give too
pieman
 
Hiya

Find out what the actual % of those over 65 is earning 50 000 or more and that will stop the argument in its tracks .

I dont have any current figures, but id suspect from demographic research I did 10 + years ago, its around 4 in 100 people.

ta
rolf
 
shady said:
A trip to movies for 2 is $50 with drinks and popcorn
Click to expand...

Most retirees I know (and this is most golf club members :() don't go to the movies hardly ever - unless there's a senior's session.

And, if they are on fixed incomes (as most of them are), they certainly wouldn't be paying the rip-off $10 for a coke and popcorn - they'd take their own lollies from the $2 shop.

Paying the exorbitant prices for lollies/drinks etc at the movies is totally a consumer minded activity, and retirees aren't consumers as a rule.
 
The pension distorts what it costs for you to live due to the discounts that come with it.

If you are on a pension your council rates are cheaper, movie tickets are cheaper, utilities, car rego, house cleaning, are discounted which means that the money you have goes further than it would if you were living off an investment income without those discounts. So don't assume that you are always comparing apples with apples.
 
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