Will you have enough money for a comfortable retirement?

The aged pension and average superannuation savings are not enough to provide you with a comfortable retirement. Find out how a property investment strategy can save you from financial stress in retirement.

Your retirement years are supposed to be the golden years of your life. A time of leisure and relaxation when you travel, spend time with the grandkids, or take up golf or a long-desired hobby. Retirement is the payoff for the hard work you’ve done in your life. 

But have you ever thought about how much money you would actually need to fund a comfortable lifestyle without the benefits of a regular paycheck? 

The Association of Superannuation Funds of Australia (ASFA) analyses how much retirees need each year in its Retirement Standard. It’s served as Australia’s trusted guide to retirement spending since 2004, advising on the minimum annual cost of ‘comfortable’ and ‘modest’ standards of living for retirees; and it’s reviewed regularly and updated quarterly in line with inflation.

Their current budget for a comfortable retirement lifestyle is $52,383 per year for singles and $73,875 for couples. 

This is based on retirees aged 65 – 84 and who own their own home – so they are not paying off a mortgage. 

You’re probably wondering if that’s realistic – or achievable. So let’s take a closer look at what those numbers actually mean and see how the pension and average superannuation stacks up.

What does a ‘comfortable’ retirement really look like?

The inclusions on the ASFA’s definition of a comfortable standard of living may be different to your current lifestyle or retirement dreams. They are: 

• one domestic flight a year

• one international flight every 7 years (so much for regular travel)

• top level private health insurance

• a $99.95 weekly allowance for couples to dine out

• $11-13 weekly allowance for couples for sport and day trips

So if you had more dinners, more golf or more holidays planned for your golden years, then you’re going to need an even higher income than the ASFA’s recommendations.

Can you achieve a comfortable retirement with a pension or average superannuation savings?

The current age pension allowance is $29,874 per year for singles and $45,037 per year for couples. That is well below the income needed for a comfortable standard of living according to the ASFA.

If you expect your superannuation to cover you, the ASFA estimates Australians need a super balance of $690,000 for couples or $595,000 for singles for a comfortable retirement. 

However, with Rest Super identifying that the average superannuation balance for men aged 65-69 is just $428,533, and $379,483 for women, the average Australian is retiring on a shortfall of around $200,000.

The key takeaway from this? If you want a retirement that’s like the lifestyle you enjoy now, you may need some form of passive income from investments outside of super.

How to bridge the retirement gap with Oli Property

Now is the time to start building alternative forms of income, so once you retire, you have access to funds that will ensure a comfortable retirement lifestyle on your own terms.

Investing in property is a great way to ensure you have more money for your retirement.  

Buying an investment property in your 30s, 40s or even 50s – and owning it for 10 years or more – provides you with a nest egg in two ways. 

If you have paid off the property by the time you retire, the income from rent becomes a passive income stream for you.

Or if you get to your retirement years but have not completely paid off the mortgage, you can sell the property and use the capital gain to pay off the last of your mortgage on your primary residence ensuring you own your home outright in retirement. 

Of course, there are also other options and at Oli Property, we’d love to help you understand them. 

If this is something that you’ve thought about before but didn’t know where to start, let’s chat. At Oli Property, we want to help you build the confidence and knowledge needed to start creating long-term wealth through property investment.

Book a Discovery Call here. 

…

This marketing material and its contents is provided for general information purposes only. No part of this marketing material constitutes any advice (financial, tax or otherwise), recommendation or representation to you as to any decision which you should make. You should not use any part of this marketing material to form the basis of any investment decision made by you. Before making any investment decision, you should take independent advice from a professional adviser which takes into account your individual needs and circumstances. All information, opinions and estimates contained in this marketing material are subject to change without notice. We disclaim to the greatest extent possible all liability whatsoever for any loss howsoever arising directly or indirectly from this marketing material or its contents.