â€œWell-offâ€ retirees will need to spend about $ 78,000 a year to keep up with increases in the cost of living and maintain their lifestyle – a jump of over $ 1,100 in six months.
Even â€œconstrainedâ€ couples will have to plan for an annual expense of $ 45,000 or $ 755 more.
Compiled by Australia Institute Senior Economist Matt Grudnoff, data for the June quarter illustrates the growing challenge for older Australians trying to ensure their retirement income lasts as long as they do.
A new national survey of more than 7,000 applicants suggests that not all are as ready as they would like for the road ahead.
Of the more than 4,500 people surveyed who said they had already retired, 30% had done so between the ages of 60 and 64. Seventeen percent called him per day at 65 and 15% between 55 and 59.
To plan for their life after work, 55 percent said they handled the process themselves, 30 percent hired a financial advisor, and 7.5 percent got help from friends or members. of the family.
More than 85 percent of respondents said they felt confident as a retiree, while 45 percent had no problem keeping up with retirement income information and 40 percent admitted that they did from time to time.
Of more than 5,200 respondents, just under 20% thought that between $ 750,000 and $ 1 million was about the right amount for a comfortable retirement.
Over 18 percent thought up to $ 1.5 million was closer to the target and almost as many (17.85 percent) offered $ 500,000 to $ 750,000. About eight percent estimated they would need more than $ 2 million.
When asked if their savings were enough to provide them with an income for life, almost 57% of those surveyed answered “no”.
The research, conducted for the over-50s digital publication YourLifeChoices, was divided into datasets for self-funded retirees who own their homes, home owners who receive an old age pension, and retirees who rent.
It also featured expert analysis on the risks retirees should and shouldn’t take based on their longevity, inflation and fluctuations in the stock market.
â€œWith potentially up to three decades and more to plan for, retirement requires a greater focus on safety net income to helpâ€¦ cover basic costs of living,â€ he said.
“Income from investments such as stocks is usually not guaranteed and income from account-based pensions is usually not either.”
For retirees who see stocks as a major component of their nest egg, the researchers pointed out that diversification is the golden rule.
However, when market volatility has overtaken even a conservative investment approach, investment advisor Robin Bowerman said YourLifeChoices retirees should be prepared to rethink their discretionary spending.
â€œIn a situation where you can’t control the market or what it brings in, your spending is something you can control,â€ he said.
â€œSlightly reducing your spending based on the reduction in your portfolio balance could ease financial stress and help you get through the crisis.
“Once the markets have settled, spending plans can be revisited.”
Mr Bowerman also warned that retirees need to mitigate the risk of inflation.
â€œAssuming the cost of living increases 3% year over year over the next 30 years, your spending will double over that time,â€ he said.
“As such, it is essential to plan for inflation as part of your investment strategy and to use ‘real returns’ rather than ‘nominal returns’ when looking at investment returns.”