Super Consumers Australia have put together this list to help plan for retirement:
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Hard to know if we should trust the figures. What are the assumptions about future earnings on investments or life span or medical needs? Drawing down the principal - needing more than the growth of savings/investments - would only allow support for a limited period. I might live comfortably - but for how many years? Where can we see the assumptions to see if they might broadly fit our circumstances?
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Hi @Oceanmapper , welcome to the community.
If you wish to read the full Super Consumers Australia report, it can be found here (link to pdf file):
https://www.superconsumers.com.au/s/ConsultativeReportRetirementSavingsTargets.pdf
The report presents further information on the motivation, methodology, outputs and implications.
As you have recognised, the numbers are guides and each person will have different circumstances. As a result, it is often suggested that for oneās own circumstances to get good independent advice from a suitably qualified and experienced superannuation/financial advisor.
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We can compare this with our experiences and those of close family members over the previous 20+ years. These cover from singles totally pension dependant to fully self funded couples.
The content Choice has provided is extensive in what it covers and through the links provided to other resources.
Expectations in retirement vary considerably. The report referenced
reveals some retirees (90th percentile couples aged 65-79 who fully own their own home) have average annual household expenditure of greater than $100,000. The majority are spending far less. Is it enough and what is required to achieve those goals? I could find answers that aligned with our observations. Itās a very comprehensive guide on minimum requirements. It may be less relevant to any with more substantial savings, in which instance itās unlikely to be the only resource consulted. One size does not fit all.
Are there gaps or exceptions, IMO?
Super Consumers Australia indicates it will be looking to consider differences in expenditure apparent between those who live in larger cities and outside of cities, updated report to be released in 2022.
The likely needs and future costs of Aged Care support and access are not considered. Possibly not covered as every Australian has access to a minimum standard of Aged Care irrespective of means. Whether the standard is adequate, or whether those with greater means can choose a higher standard of service is likely a different discussion.
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This is the āpoverty optionā as I call it. I was kinda forced into it by increasing ill health and had to bail on employment in 2011. I was on Disability Support for 4 years until the government pronounced me cured and put me on the age pension at 65. When I had to leave work, after many years of winding down (and thus not garnering much in the way of SuperAn) via part time and casual work, I pulled what there was of super and paid my house off.
Its not so badā¦ unless, as you say, there are dental bills and house maintenance to deal withā¦and then, life becomes a matter of paying for what, at what point.Iāve replaced most of my whitegoods and appliances, but still have a stove to go. A fellow comes to mow the lawn and deal with weeds every month in winter and fortnightly in summer. I need some painting done inside, and whilst I could probably do it myself I am grossly unmotivated and soā¦
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Sorry to hear that but glad that you are managing ok.
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Sounds eminently sensible. The pension is not much, but if youāre renting or still paying a mortgage it would be difficult to survive.
Strangely, people can still get the non-cash benefits of the pension while earning quite a lot of money ($2,165.20/fortnight for an individual, $3,313.60/fortnight for a couple). This is unlikely to change any time soon, given the number and political power of the people who take advantage of it. There is also an assets test, which excludes the home, and for a couple who owns their home is $915,500.00! If you do not own your own home, you can be a millionaire couple and still get the pension! (Granted, a million dollars does not go as far as it once did.)
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Of course, there is a difference between the full aged pension payment, and some sort of part pension.
The assets test starts to reduce the pension payment at far lower levels than the upper limit where it cuts out completely.
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I am in my early seventies and am extremely naive about superannuation and availability of / access to a pension or part pension - and the recent Choice / Super Consumers Australia article has confused me even moreā¦ (āOur new targets for your super in retirementā).
In that article, the first table shows (Column 3, bottom row) āThen you need to have saved this much by the time you are 65, ON TOP OF your income from the Age Pensionā, and suggests an asset figure for Couples of $1,021,000. BUT, Services Australia website says that NO pension is available if your joint $ assets are more than $1,140,000.
Surely, if you wanted the āHighā assets balance of $1,021,000 to enjoy retirement, as recommended in the article, you would NOT be entitled to the Age Pension, OR if you were (just) entitled to it, it would only be a negligible amount?
Can anyone explain this to me in laypersonās terms?
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You are correct in saying that the Assets test would prevent the payment of a pension for homeowners at the time of retirement. However, over time the super balance may diminish and also the threshold amounts will increase. Those changes will mean that at some time in the future the asset value will be low enough to receive a part pension.
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Hi @Gfredd, welcome to the community.
In relation to the amounts, these are those on retirement. During retirement the capital component of superannuation is drawn down over time and then this occurs, under the current system, the age pension may become more important component of oneās retirement income.
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Thanks Glenn61 and phb - itās much clearer to me now, regards Gfredd
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No problem then. 
You just have to land your assets exactly in the small range from 1,021,000 to 1,140,000 without falling foul of the gifting rules.
If this is for yourself, and you donāt currently get any pension, I see no problem with just applying for a pension or part pension. The government will ask the needed questions, assess your situation, and you arenāt worse off if they knock you back - well, unless youāve got a zillion dollars of unexplained wealth.
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The table you refer to is a very simplistic measure of the difference between how much income you could receive on the FULL pension plus all available supplements, and your desired expenditure per year.
So in the simplest case in the table, a single could get around $25500 per year, but needs to spend $29000 per year, then you would need to draw down from savings $3500 a year.
A higher example of desired expenditure of $51000 per year would require a draw on your savings of $25500 per year. Half from full pension plus half from savings. But in that example you are way over the $270000 point where the aged pension starts reducing.
The report doesnāt say, but they seem to assume that once at aged pension elligibility you will only live another 20 years, and at that point all savings have been depleted.
In the higher end case you refer to, there would be no prospect of getting anywhere near the FULL pension given the asset and income rules, and assets are not just super accounts; they can include anything apart from the home you own and live in.
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So Iāve turned 60. Despite not working since 2006 when I had a bad car crash leaving me with a few disabilities I feel and think retirement.
I donāt have a mortgage and rent. Iām planning to move for the last time into my forever home which I will leave feet first. So Iām house hunting for that special place where I want to be in a position of financial comfort but how much will that cost? Over 55s living and retirement villages will provide me with security and will support me in my activities of daily living. At what cost? From what I have researched it seems that I might be able to purchase a property but I have to lease the land.
There are many fees involved in living within a community. At present Iām receiving the disability support pension. My superannuation has been enough to get me through those intermittent times of having to pay a large sum of money and there wonāt be enough money left to rely on in a crisis.
I arrived in Australia in 1990 so had a pension in the uk. The amount is @$500/ month. Whilst it is very handy itās hardly going to be used for petrol and groceries.
I had an inheritance from my Mother which is going to be the majority covering my housing however Iām still in the dark regarding the cost of joining a community.
So itās that question
How Much Do I Need To Be Financially Comfortable.
How long is this period of my life going to be? Have I got enough to immerse myself in a retirement community. So many unknowns leaving me feeling uncertain of my future. There are only so many definite answers and questions.
How can I be comfortable in retirement with all of the unknowns. My choice of where Iām going to live is also limited.
So I have a lot of searching , questioning, finances to name a few within hopefully the next 3 months.
I have to have surgery on my back in the next 4 weeks. It will involve long periods of rehabilitation and I was told I will have back pain for the rest of my life. Just something else to deal with.
So Iām entering into an unsteady time of life. I hope that the answers to most of my questions are final without potential twists and turns and uncertainty.
I would like to think that retirement will be smooth and stable in all ways.
So how many dollars is it going to take to reach my aspirations of nirvana.
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Welcome to the Community @Floss62
I merged your post into this existing topic you might peruse, as well as these about āretirement lifestyle communitiesā.
and while much of it is dated, there are some good links included with the last update 2021.
I trust this is helpful to get you going.
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Welcome to the community @Floss62.
So many questions and doubtless several significant challenges in life recently and ahead. Your situation sounds complex. Itās likely a balance between needs, expectations and financial resources. A further consideration is where in Oz one is thinking of living forever more.
Have you looked to the financial advice options available to you as someone who has access to a disability support pension? There may be some further key decisions arising when you reach your statutory retiring age. Only someone expert in retirement needs and totally familiar with your very specific circumstances is likely to be able to offer the best specific advice. You may find your available financial capacity limits your options?
Weāve family members who have been part of lifestyle communities (at great expense), others who have become dependent on aged care (in home or at a dedicated facility) and others who have been 101% determined to not be part of either. Our observation is wealth and income well above the norm is essential to enter a lifestyle community and meet all the ongoing fees. For those that offer additional services as one ages, they all add to the ongoing fees, costs and debt. These increase each year at more than CPI, hence any estimate based on current fees needs a more complex financial analysis, considering most of us will reach 80 years of age, and many 90!
Look to the Choice discussions @PhilT has linked.
As an alternative consider what it might cost to own a property independent of any lifestyle community. Determine if there are in home support options that may meet your needs at a lower ongoing cost? We have family members who have chosen that path with good outcomes, although typically in regional cities and towns where housing costs have been far more reasonable.
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Thankyou for your thoughts and guidance. All of your comments were valid and appropriate.
Iāve decided to live in Victoria. South east Gippsland is my preferred location.
I have been crunching the numbers as far a ownership is concerned. Properties within my ink price range are few and far between. I have seen a couple which is enchanted. I not that keen on getting a mortgage. Itās difficult when my age isconsidered. I donāt want to leave this mortal coil in de t which will get dumped on my daughters. I believe I have some death insurance with my superannuation. I have funeral insurance. .
After crunching the numbersy I was shown how much of a mortgage I could get. I obviously donāt want to borrow a huge amount but enough to help me h. I will arrange a a short term mortgage which on paper looks gvery achievable for paying it off.without leaving me poverty stricken with the repayments. So thatās where Iām at now. Iām collating my finances to clarify the situation.
Sorry I be rattled on. But talking about it regularly will hopefully lead me to a positiveoutcome
and there is a
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Randoms in a forum are not a substitute for financial advice but ā¦
If that is your goal and you are seriously contemplating a retirement village then it is important to think about whether the retirement village has an associated (on site) aged care facility. Otherwise, it might not be possible for it to be your forever home, well unless you really are determined to be carried out in a box (and perhaps sooner than need be the case).
I donāt think you mentioned whether there is a Mr or Mrs Floss62, which is clearly another consideration in the whole picture. Or, for that matter, any little Floss62s (who would presumably by now not be little).
I guess also, given the constraints on your situation, it is fair to ask whether you should actually move. In other words, not knowing much about your life, is there a compelling argument to move at all? Clearly only you know what your exact motivations are.
Just my opinion, but I am a little sceptical of retirement villages. You pay a lot of money for a glossy brochure with happy smiling people on the cover, and for a lot of facilities that you may use seldom or never. So you need to ask yourself whether you are a people person and whether you will use the facilities.
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There will be conditions attached by your super fund. Some funds cease coverage at retirement age. If it can be continued it will likely increase in cost rapidly at risk of depleting your super. It would be prudent to fully establish what you have been provided with your super.
With respect to the costs of your āforever homeā, CanStar made particular reference to Victoria.
The following is informative.
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