Trying to plan your retirement budget but not sure where to start? We’re discussing the need-to-know information when it comes to saving and spending during retirement. After all, your retirement years are set out to be some of the best of your life so you must understand the cost of your dream lifestyle and how to make sure it becomes reality.
How much do I need for a comfortable retirement?
Retirement lifestyles are often categorised into tiers of annual spending, comfortable, modest and a retirement that relies on the Age Pension. There is no one-size-fits-all when it comes to a retirement budget, so you’ll need to consider what you see for yourself. Will you be enjoying some well-deserved travel or relocating? Perhaps you’ll take a more low-key approach, taking up new hobbies or volunteering at a local charity. Take a look at the below figures to understand where you fit in this scale, or even where you’d like to be. Under the assumption that you own your house, the estimated yearly expense from retirees in Australia is as follows.
A comfortable retirement lifestyle is estimated to cost $70,000 per year for couples, and $50,000 for singles. This lifestyle leaves you with funds for occasional holidays, house repairs and renovations with plenty for day-to-day living and memberships.
A modest retirement lifestyle will see cutbacks in some of the above areas, your day-to-day spending will be less, you’ll be able to afford a car and perhaps rather than international holidays, you’ll enjoy staycations. The estimated annual cost for couples with a modest lifestyle is $47,000 for couples and $32,000 for single retirees.
A retirement lifestyle that is solely reliant on the age pension will mean an extremely budgeted lifestyle. Your spending will be limited to necessities, with payments up to $43,000 for couples and $28,000 for individuals. It’s important to note that the value received from your age pension is dependent on your eligibility.
So, what does this mean for your Superannuation fund?
How much should you have when it’s time to leave the working world behind? As we’ve said it depends on your lifestyle preferences. The Association of Super Funds Australia recommends that to enjoy a comfortable retirement single people will need $595,000 and a couple would require $690,000 in conjunction with other investments.
Please note, that the figures provided are indicative, assuming that you own your house and no longer have mortgage payments.
Be Savvy
It’s never too soon, nor too late to begin panning your retirement finances. Make sure to diversify your investments to mitigate risk and make regular contributions to your Super fund. Consider how you wish to spend your retirement years and use this to inform your financial plan. For example, if you’re not planning to travel extensively, withdrawing your Super fund in a lump sum could mean you are taxed more than when setting up a monthly income stream.
How to budget during retirement
Budgeting in retirement is essential to ensure you don’t spend your way through your hard-earned pension pot and get caught with unexpected bills. When estimating your living costs in retirement it’s important to account for yearly inflation as well as ensuring you’re well prepared for unexpected costs.
Many retirees downsize, swapping household maintenance for free time and releasing equity in their homes to put towards their dream retirement. If you think you’ll follow suit, a St Ives Retirement Village could be perfect for you.
But, what are the benefits of living in a retirement village?
Built with purpose, our villages are safe and secure retirement communities that offer a range of manageable accommodation options, including stylish apartments and 3-bed homes. We even take care of your maintenance woes with landscaping included as part of your yearly costs! Designed to cater to a range of lifestyle preferences our villages are perfect for those looking for the ultimate lock-and-leave lifestyle, with peace of mind knowing you won’t be coming home to overgrown gardens or a leaking roof!
Equally, if you’re looking to live in a community of like-minded people where all you need is close by, retirement villages are your perfect option! At St Ives, you’ll find a range of fantastic amenities on your doorstep from your everyday essentials to luxe amenities including alfresco dining, indoor pools and arts centres.
Attend a village tour to learn more about life in a St Ives Retirement village.