Wow-wee!
Last week’s column on how much you should retire prompted an avalanche of responses from readers.
“That’s VERY LOW!”
“Are they eating baked beans in retirement?”
“You need AT LEAST $1 million to do anything halfway decent in retirement!”
Let’s recap:
Super Consumers analyzed actual retiree spending data and concluded that the average Aussie home-owning couple in their late 50s needs $402,000 to fund a comfortable retirement. And to be clear, this figure takes into account the rising cost of inflation, medical expenses, and senior care expenses.
This figure surprised many readers.
“Why was it so much less than the ‘magic million’ that is always lurking? they asked.
Well, that’s because this “millionaire” retirement figure has been heavily influenced by super fund lobby ASFA (Association of Superannuation Funds of Australia), who calculate their figure for a comfortable retirement at $640,000 for a couple and $545,000 for a bachelor
However, this is not a realistic figure for the average Australian.
In fact, according to Super Consumers, this ASFA figure is only achievable for the top 20% of retirees. And that also explains why the government’s independent Productivity Commission advised policymakers to simply ignore it!
However, the media have not ignored it, but have consolidated it. And in doing so, it’s created a much bigger problem that affects millions of retirees, rich and poor alike: They spend what little time they have left worrying about money, and hoarding it, instead of enjoying it. .
My point of view?
The million dollar retirement number is a myth. It’s basically like saying to a thirty-five-year-old, “Look, I ran the numbers, and if you’re not making $200,000 a year by now, I’m sorry, but you’re going to live a shitty life.”
Touch the two!
As long as you own your own home, you can live a meaningful, purposeful retirement with a lot less money. After all, we are incredibly lucky to live in the greatest country in the world, with a strong social safety net based on the old age pension plus subsidized medicare and the elderly.
And the truth is, whether you’re 35 or 65, once you’ve comfortably covered the basics, having more money won’t necessarily make you happier.
For example, this week I spoke with a retiree who admitted that he had spent the best years of his life working at a job he hated so that he would have “enough” money to retire. Now, five years into retirement, he told me that the things that made him happy were: catching up with his daughter, watching the footy with his son, walking on the beach at low tide and sitting on the porch in the afternoon sun. And none of them cost him a cent.
Make your own way!