Cost of living in retirement
What will your costs be? Your cost of living will depend on your situation and the vision you have of your retirement.
What’s your vision for your retirement?
When thinking about the level of income you need in retirement, a good starting point is to consider what your current take home pay is. You can then start to think about which expenses may decrease, what might increase and what is expected to stay about the same.
It can be quite surprising (and somewhat frightening for some!) to consider what your living costs might be in retirement, because retirement isn’t what it used to be. Many people remain incredibly active, and often spend quite a bit more in the earlier years of retirement than they expected.
If you aren’t sure about how much you are going to need, or you want to see how this stacks up with other retirees, then the ASFA Retirement Standards can provide a ballpark figure based on actual retirees across Australia. They consider the different income needs for a modest and a comfortable retirement.
A modest lifestyle is restrictive and really only sees you enjoying the basic things in life. In fact, it’s only slightly better than living on the age pension.
A comfortable lifestyle, however, would see you eating out regularly, affording private health insurance and going on holidays.
The current estimated yearly income for both a single person and a couple living modest and comfortable retirement lifestyles are:
|Modest lifestyle||Comfortable lifestyle|
|Total per year||$28,179||$40,739||$44,224||$62,562|
Source: ASFA Retirement Standard, December 2020
Get a better idea about what you’ll need
By using a retirement calculator, you can get a clearer picture of how much you’re likely to need to meet your retirement goals and work out how much super you’ll have when you retire.
What if I don’t have enough?
If you’re worried about your super balance, don’t stress; there are a number of ways you can grow your super for retirement. It’s never too late to start.
It’s also handy to get personalised financial advice to help you reach your retirement goals. Your first session with a Statewide Super Financial Planner is provided at no additional cost and is obligation-free. Book an appointment or call 1300 65 18 65.