Bridge the retirement gap so you can spend your golden years doing the things you love, rather than in financial stress.
The years of retirement are known as the ‘golden years’ of a person’s life. A time of leisure and relaxation, of spending time with the grandkids, taking up golf, and yearly tropical cruises – the payoff for a life’s hard work. But have you ever thought about how much money you would actually need to fund this kind of lifestyle? The Association of Superannuation Funds of Australia (ASFA) has done some of the hard work for us with their Retirement Standard. It’s served as Australia’s trusted guide to retirement spending since 2004, advising on the minimum annual cost of ‘comfortable’ and ‘modest’ standards of living for retirees; and it’s reviewed regularly and updated quarterly in line with inflation. Their current budget for a comfortable retirement lifestyle is $45,239 per year for singles and $63,799 for couples. You’re probably wondering if that’s realistic – or achievable – so I’m going to take a closer look at what those numbers actually mean and see how the pension and average superannuation stacks up. What does a ‘comfortable’ retirement really look like? I’m fairly confident that the ASFA’s definition of a comfortable standard of living isn’t equal to your lifestyle today. Some of its inclusions are:
one domestic flight a year
one international flight every 7 years (so much for those yearly cruises!)
minimum private health insurance
an $85 weekly allowance for couples to dine out
$10-12 weekly allowance for couples for sport and day trips
So if you had more dinners, more golf or more holidays planned for your golden years, then you’re going to need an even higher income than the ASFA’s recommendations. And what are the pension and average superannuation worth? The current age pension allowance is $25,155 per year for singles and $37,924 per year for couples; as you can see, that’s well below the income needed for a comfortable standard of living according to the ASFA. And while the ASFA estimates Australians need a super balance of $640,000 for couples or $545,000 for singles for a comfortable retirement1, the average Australian is retiring on a shortfall of $200,0002. The key takeaway from this? If you want a retirement that’s like the lifestyle you enjoy now, you’re going to need some form of passive income from investments outside of super. How to bridge the retirement gap with Oli Now is the time to start building alternative forms of income, so once you retire, you have access to funds that will ensure a ‘comfortable’ retirement lifestyle on your own terms. Investing in property is a way to bridge this retirement gap. I’m here to help you on your education journey so you can build the confidence and knowledge needed to start creating long-term wealth through property investment. If this is something you’ve thought about before, but didn’t know where to start, I’m happy to say you’re in the right place! Start with exploring our other articles, or if you’re ready to dive right in, let’s chat. …
SUMMARY They’re known as the ‘golden years’ of a person’s life: a time of leisure and relaxation, of spending time with the grandkids, taking up golf, and yearly tropical cruises – the payoff for a life’s hard work. But have you ever thought about how much money you would actually need to fund this kind of retirement lifestyle?
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