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
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 ...