It’s no secret that the cost of living is on the rise. If you are thinking of retiring, or have already done so, significant price increases in non-discretionary items such as food, fuel, gas, electricity, and healthcare will impact your retirement budget. Good financial planning advice can help you navigate this changing environment so that you can avoid too many nasty surprises.
Everyone’s needs and expectations for retirement are unique. However, if you are wondering how much money you will need in retirement a good place to start is the Association of Superannuation Funds Australia (ASFA) Retirement Standard. Currently the ASFA standard for a comfortable retirement income is $47K per annum for singles, $66K for couples. The Standard is updated quarterly to take into consideration the rising price of items like food and utility bills, as well as changing lifestyle expectations and spending habits. The Standard includes the cost of things such as health, communication, clothing, travel, and household goods.
Going forward retiree households will continue to face ever increasing health costs. While there is considerable subsidisation of health costs and benefits being paid from private health insurance, out of pocket expenses remain substantial for items such as dental treatment, optical expenses, and gap payments for procedures in hospitals, and private health insurance premiums also continue to increase. Substantial increases in the cost of electricity and gas are also expected.
When it comes to retirement planning it is wise to have some flexibility and wriggle room so that you can manage if unforeseen expenses crop up. We always advise our clients not to overlook some of the less obvious retirement expenses. By spending some time doing a deep dive into your unique circumstances you can save yourself pain down the track. Having a financial plan for retirement will provide you with peace of mind so that you can get on with living and having fun. Get in touch.
General Advice Warning: The information provided in this article is general in nature and does not consider your particular investment objectives, financial situation, or insurance needs; we therefore recommend you seek advice tailored to your individual circumstances before making any specific decisions.
Dobbrick Financial Services (Gympie) Pty Ltd ABN 48 931 205 109 and Dobbrick Financial Services (Ipswich) ABN 86 100 184 521 & DFS Oakland ABN 64 340 527 395 and their advisers are authorised representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306.
