Retirement | Wealth Creation

What lifestyle are you planning for when you retire?

What lifestyle are you planning for when you retire?

A lot of consideration and effort is required when it comes to planning retirement savings that may be years away.

One of the most important steps in planning to save for your retirement is figuring how much you will need to spend each year to live a comfortable lifestyle. Planning a budget to retire into the future can be a daunting task.

How much money will I need?

To support a comfortable lifestyle, the 2024 Association of Superannuation Funds of Australia’s retirement standard states that individuals around the age of 65 will need the following p.a. to retire:

  • For couples: $70,806
  • For a single person: $50,207

Both budgets assume that the retirees own their own home outright and are relatively healthy.

What is a comfortable or modest retirement lifestyle?

A comfortable retirement allows retirees to participate in a wide range of leisure and recreational activities and enjoy a high standard of living. This includes purchasing household goods, private health insurance, a decent car, fashionable clothing, electronic equipment, and even domestic and international vacations.

While a modest lifestyle is superior to the Age Pension, it only covers the basics.

Comfortable LifestyleModest LifestyleAge Pension
BudgetCouple $70,806
Single $50,207
Couple $45,946
HealthTop level private health insurance, doctor/specialist visits, pharmacy needsBasic private health insurance, limited gap paymentsNo private health insurance
ICTFast Reliable internet/telco subscription, computer/android mobile /streaming servicesBasic mobile, modest internet data allowanceVery basic mobile and limited internet connectivity
CarOwn a reasonable car, car insurance and maintenance and upkeepOwning a cheaper, older, more basic carLimited budget to own, maintain or repair a car
RecreationRegular leisure activities including club membership, cinema visits, exhibitions, dance/yoga classesInfrequent leisure activities, occasional trip to the cinemaRare trips to the cinema
MaintenanceHome repairs, updates and maintenance to kitchen and bathroom appliances over 20 yearsLimited budget for home repairs, household appliancesStruggle to pay for repairs, such as leaky roofs or major plumbing problem
HaircutsRegular professional haircutsBudget haircutsLess frequent haircuts, or self-haircuts
UtilitiesConfidence to use air conditioning in the home, afford all utilitiesNeed to keep a close watch on all utility costs and make sacrificesLimited budget for home heating in winter
MealsOccasional restaurant meals, home-delivery meals, take-away coffeeLimited meals out at inexpensive restaurants, infrequent home-delivery or take-awayOnly local club special meals or inexpensive take-away
ClothesReplace worn-out clothing and footwear items, modest wardrobe updatesLimited budget to replace or update worn itemsVery basic clothing and footwear budget
HolidaysAnnual domestic trip to visit family, one overseas trip every seven yearsAnnual domestic trip or a few short breaksOccasional short break or day trip in your own city

Assets test for age pension

The Australian government uses the assets test to determine if you are eligible to receive the Age Pension. This test also affects the amount you will receive in retirement.

Different types of assets are evaluated as part of the assets test. The value of your assets, as well as whether you own a home or are in a relationship, will determine the payment amount.

The assets test limits exist to ensure that only those who meet the criteria receive the Age Pension.

Make an appointment today

Our wealth creation representatives can help you plan to retire and be financially secure, make an appointment with our Wealth Creation team today.

Read our other articles for more great insights:
Goal Setting – Planning for success or Maximise your Age Pension + many more.

The information provided in this article is general in nature only and does not constitute financial advice