Australians are facing retirement with an additional cost of $13,000 and an increase in retiree annual costs. This spending increase is making “many Aussies rethink their goals and re-evaluate retirement. “ Retirement spend…and rethink. “Increases in expenses, which are fundamentally needed in sheltered, healthcare, groceries, utilities, and housing
What is Causing Retired Aussies Expenses to Rise
Healthcare spending has increased, “gap payments, and medications cost, becoming more difficult for retirees to pay with the medical front moving more expensive with expenditures of the pharmaceuticals. “ which is making retirees pay more out of pocket that they did not plan for. Retired Australians “ Facing skyrocketing electricity, gas, council rate, and housing expenses which is fixed and more difficult to budget. ”. Most retirees “expect some expenses to remain with in the groceries, housing, and home insurance. ”.
How Much Do You Actually Need?
According to financial experts, couples now need about $70,000 annually for a comfortable retirement, while singles need about $50,000. The Age Pension provides significantly lower benefits: about $44,000 for couples and $29,000 for singles. Australians will need to depend more on their superannuation to cover these lower benefits. However, with the average super balance at retirement being $250,000 for men and even lower for women, many retirees are encountering a financial reality that is far more challenging than expected.
What Can You Do?
If you are within retirement age, it is the right moment to look at your finances again. A financial adviser could help you with your super withdrawal strategy, age pension maximisation, and budget gaps. You need to look at your expenses at this age.
This documents the difficult situation that many Australian retirees find themselves in. You may want to think about downsizing your home. The government has perks for older adults looking to downsize, and selling a larger home can increase your retirement income considerably and, under certain conditions, won’t impact your Age Pension eligibility.
Planning Ahead is Essential
For those still in the workforce, this news means that the time to increase your super contributions is now. Even a small increase to your super contributions can make a big impact because of compound interest. Contributing extra salary to your super, or other after-tax contributions is a step towards a greater retirement buffer.
There is no doubt that retirement is becoming more expensive. The assumption that you will need less money when you retire is no longer true. If you are retired or planning on retiring, now is the time to make your retirement cash more expensive to secure your retirement years, and truly enjoy them. Remember that your retirement strategy is waiting for you to be reviewed.
