Here’s why YOUR scenario will differ from others in retirement:
- For couples, if you and your spouse are different ages or you don’t retire at the same time. This will impact your cashflows including the Age Pension and employment.
- For singles, the Age Pension rates, bands and thresholds will be different to couples. The Age Pension helps about 80% of Australians at some point – even if they’re quite wealthy.
- If you are above average health and/or have a healthier lifestyle than average. This is likely to result in a lifespan that is longer than average. It would mean you need more savings (or to spend less). The opposite applies if your health is below average.
- If you work part time in retirement. This means your required level of savings to support a particular lifestyle can be lower.
- If you are likely to receive an inheritance or other lump sum. Depending how likely this it, it may be factored in to top up your retirement savings and lifestyle.
- If you plan to deliberately spend more in the earlier years of retirement and less when you reach advanced ages. For example, if you planned to take an annual holiday until age 75 and then reduce your living costs thereafter. This may mean you need to have more or less saved – depending on the levels of spending.
- If you invest in very cautious investment options. This would require a careful review. It may mean you need to save more (or spend less) than if you take some investment risk.
- If you plan to (or are willing to) downsize your home in the future, or to use ‘equity release’ including the government’s Pension Loans Scheme. This may mean your required level of superannuation savings is lower.
- If you wish to ensure you can leave a minimum level of bequest when you pass away. This would mean you need to save more (or spend less). You would also need to save more if you wish to set aside a specific extra lump sum for potential aged care costs.
- If you think future changes to the Age Pension (e.g. means testing rules) could be less generous than those modelled. Different rules can be tested and would mean you may need to save more (or spend less).
- If you are a couple and you expect your spending needs would not reduce if one of you passed away. This would mean the savings you need at retirement would be higher as the figures above assume spending drops by 30% if one person passes away.
Australians need to tune out people who say you need $1million to retire. The truth is you can tailor your own unique number to your own individual lifestyle. You’ll need a high quality retirement projection – that allows for all the above. Jubilacion are happy to help you with that. Often customers are surprised to hear they can retire (safely) earlier than they’d anticipated.
