Retirement Planning & Experiences

[Aeryn]

$10k per month is hard to spend

I would think it quite easy especially if you are travelling regularly.

I wont be retiring for almost 20 years but I cant see how I could possibly have a comfortable life (even though I own my home so have no rent) for what these retirement planers say you can unless I give up all travel, going to the theatre, dining out, replacing clothes when they are worn out, internet and streaming services.

Seriously $80k is not a liveable income for a single in Sydney unless you are a hermit that only eats generic brand supermarket food and doesn't have a social life.

Why is one expected to give up a full life because you have stopped the Mon - Fri grind? I want to retire on at least 80% of my pre-retirement income.

And downsizing isn't an option when you already live in an apartment.

 

[TheRealTMA]

$10k per month is hard to spend

You are forgetting the wine bill

 

[Quickstatus]

They say a comfortable retirement can be had on 80k a year

Depends - several factors
Place of residence
Other assets outside of pension/super/annuity
Inflation and the value of money
Domestic partner and their financial position
Fixed costs - house insurance, house maintenance, private health insurance, car expenses.
Another way to put it is whether the $80K is a 100% available for discretionary spending outside of the fixed costs above. If so then even Sydney is fine.

One way to reduce housing fixed costs is to downsize at retirement because of:.
A large house insurance (not apartment) in Sydney can be $15000 pa then add in private insurance for a couple $10,000 and that is about $25K pa or $1000 pw (edit $1000 /fortnight - thanks @Steady for maths lesson)
People forget to factor in House maintenance costs after retirement- maybe 1-2% of value of house per year depending on the house. $4M house in Sydney would be $80,000/year. . The older the house the higher the maintenance budget. Downsizing would/can reduce that significantly

 

[hydrabyss]

I'm in my mid 60s and moving to retirement now, and went through the same types of questions etc 10 years ago. And the usual disclaimer, I'm not in the financial game, get your own advice etc.

The best advice I can give though, is find a good financial advisor who understands all of the rules around income and capital gains tax, accessing super for retirement etc, and how much a year you need - do you know now how much you're spending now, broken into the different categories? For example, as you get older, medcial bills can be bigger.

It sounds like you might have a government type scheme behind you and there are a lot of rules, obvious and hidden, around them. Ask around for recommendations for an advisor, meet them and check them out to see how knowledgeable they are around the rules of your particular scheme, what options they can provide, preferably not locked to a single product or brand. If you decide to proceed with them and get the full advice, it will probably cost you $5,000-10,000, but it's worth it.

Its not as simple as I first thought as a few % extra returns from well placed investments adds up quick. When the time comes I will need to look into diversifying into some other investments that have decent returns.

 

[cove]

Wouldn’t want any AFFers to get onto struggle street by retiring early not realizing what future costs will be for health issues and home insurance as well as food and living expenses. Better to be safe than sorry. Is something our previous generations would say.
The cost of living in Sydney or Perth has certainly risen way faster than the official inflation numbers that get reported.

 

[Quickstatus]

Bear in mind also the aged care costs.
Nursing home placements require an upfront refundable accomodation deposit exceeding $900K in some parts of Sydney these days plus some means tested additional costs. Ive discussed it elsewhere. I would not be surprised it will soon hit $1M. The refundable deposit is now also 90% instead of the full 100% when the client exits the NH
Of course if the person has zero means and living off OAP, then the govt will step in but the NH placement choices are never as good including a waiting list. All NH are required to take a certain number of pension only patients/clients.

 

[serfty]

You are forgetting the wine bill

That's what extensive cellars are for ...

 

[cove]

Now that we are down to wine it looks like we are good to go.
The nursing home deposit can be a real problem especially when women can outlive their male partner so if the home is sold where does the survivor live?

 

[Happy Dude]

As per @Quickstatus post, aged care is often overlooked in retirement planning. Here's an excellent article explaining the many costs.

Not sure if it's paywalled or not, or if there's an Aged Care thread here that this could also be posted in).

Why your aged care could cost more than a Ferrari

While we baulk at the price of a luxury car, for many Australians, the most expensive purchase they will ever make isn’t a Ferrari – it’s aged care.

www.smh.com.au

Don't worry about the transfer of wealth between generations, the Aged Care system is designed to transfer family wealth to corporations.

 

[Steady]

One way to reduce housing fixed costs is to downsize at retirement because of:.
A large house insurance (not apartment) in Sydney can be $15000 pa then add in private insurance for a couple $10,000 and that is about $25K pa or $1000 pw

If it’s either or, I would choose $25k pa

 

[Brissy1]

All NH are required to take a certain number of pension only patients/clients.

I thought it was optional, with reduced gov subsidies.
The RAD at Greenwich Place Sydney can be >$3m although there are cheap rooms for not much more than $1m. If pensioners get those, I'm going on the pension!

 

[Quickstatus]

I thought it was optional, with reduced gov subsidies.

That is correct Nh providers can operate outside of any Govt subsidy. But they are fully privately funded.

I would not be surprised some of the rooms at Greenwich place is occupied by OAP only. Likely the $1M rooms.

 

[hydrabyss]

For a single yeah $80k
$6.5k per month
Without a home loan nor rent that’s feasible. Without a car even better

$10k per month is hard to spend

As for finishing up in your early 50s, see my listing above. There’s rarely a dull day doing the rounds of morning coffees. In the absence of friends, AFR or Australian

There’s strata or sporting committees.
There’s zany sports like. Cliff diving or artistic cycling (gymnastics on a bike)
There’s Travelling including AFF events - there’s free local transport after 60
There’s poetry groups, there’s lunch on the lawns or concert bands to follow. And help support
There’s Fringe events and hobbies
There’s household stuff to be done - model train tracks to assemble
There’s a new wardrobe

There’s a later in life partner
There’s dining out and coughtails
Gosh there’s even cruising
There’s walks like the Camino or Berlin Wall
There’s social media or books to read, there’s learning and growth

Luckily I have the most important thing which is my partner but at 64 she would like to retire soon. Hence the reason I need to start planning as there is so much to consider. When I left full time work 10 years ago there was a few things I got wrong partly due to bad information at the time and not going back and checking before I left work. She works in aged care so work is easy to get even at 64 and I will still have what I have been doing if I want to go back to it down the track.

 

[clifford]

The best retirement (non) planning is to have a partner who dies in service with the NSW Govt or a university (Unisuper).

Ask me how I know. Personal experience, more than once.

It's not something you'd wish on anyone, but it can set up the surviving partner for life.

 

[TheRealTMA]

That's what extensive cellars are for ...

Not really. When you get to retirement it’s time to drink them rather than store for others after you can’t drink anymore.

 

[hydrabyss]

When I was a CPA I saw folks retiring with a nest egg of less than $200,000 in the nineteen seventies with no debt and a home with no mortgage.
They were caught out badly by the changes in the cost of living if they lived 30 years or more past retirement.
Now in 2026 inflation is worse so you really need to think about your future if you retire young.
Right now many retirees are going back into the work force to bolster their finances.

I worked out what that would be in todays money and that's no small amount.

 

[JohnK]

But if eligible some time down the track, you should exercise that entitlement. There is no shame is claiming the OAP.

Absolutely, not disputing that I can I just hope that I don't.

Interesting @JohnK that you plan to hold IPs in retirement. I think it's relative to the value of the IP at retirement, but I plan to (strategically) sell and dump the proceeds into a pension fund as the annual effort/costs of the IP and low-ish rent can't compete with a chunk of cash earning 7% or so tax free. Not particularly attached to the IP which is nothing special.

The plan is these will go to daughter but please don't tell her yet.

My brother and I have decided that mum & dads house will go to daughter. I will also leave all my investments to my daughter and my brother will leave half his investments to his niece/God daughter which is one and the same. We will need some advice from lawyer at some point because I would not want daughter to be able to sell until she is mature enough to understand life. (Also note we are not telling daughter she has this inheritance so she can work hard and be self sufficient or marry rich man)

When I was a CPA I saw folks retiring with a nest egg of less than $200,000 in the nineteen seventies with no debt and a home with no mortgage.

My parents have lived 35+ years on sickness benefits and then old aged pension with basically no savings. It depends on what you want from life.

 

[serfty]

My parents have lived 35+ years on sickness benefits and then old aged pension with basically no savings. It depends on what you want from life.

They own their home I believe; that makes a rather large difference.

 

[serfty]

Not really. When you get to retirement it’s time to drink them rather than store for others after you can’t drink anymore.

That is my point. A nice investment and when the time comes you can deplete the cellar carefully and at the same time study important things how well various purchases you have made age ...