I’ve been asked more than once in the past 2 weeks about how much is needed for a comfortable retirement. And, how cask wine and domestic holidays fits in with what they have heard. Let me explain…. What’s most important is the lifestyle you want to lead in retirement, guiding your target retirement income.
The Association of Superannuation Funds of Australia commissioned a report and developed the ASFA Retirement Standard that benchmarks spending by retirees. The standard is designed to help people determine how much budget they may need to fund living and lifestyle expenses in retirement.
According to the report, a fairly modest lifestyle in retirement includes the basics. It’s considered better than the aged pension. In the June 2018 report, for couples there is a weekly allowance for:
- groceries ($164.38)
- hairdressing ($9.69)
- alcohol ($22.75) and
- domestic holidays ($45.58)
- amongst other expenditure items totalling $755.60 (or c. $40,000 per year).
Whereas the budget for a comfortable lifestyle by comparison is c. $61,000 per year. Which provides more money for groceries, a decent haircut and presumably allows for bottled wine and more holidays (both domestic and occasional international); as well as a range of other goods and services.
Let’s be clear, the budget standards assume an fully owned home and good health. Therefore if your circumstances are different and/or you have your own views on what is comfortable for you, then you will be well advised to consult with a financial planner to develop a plan that suits you.
Give me a call if you’d like more information about this weeks topic, or if you’d like to book an appointment.
You can view the report here: https://www.superannuation.asn.au/ArticleDocuments/269/ASFA-RetirementStandard-Budgets-Jun2018.pdf.aspx?Embed=Y