# Retirement Income



## Julia (6 June 2007)

I was surprised to see painted across a bank window recently the following:

    "87% of Australians retire on $13,000 per annum"

This represents the single rate of the Aged Pension.

If I'd tried to guess how many people would fall into this category, I'd have said around 50% - 60%.

Are you surprised about this?

In today's dollars, what level of income do you envisage having in retirement?


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## silence (6 June 2007)

I'd say 30000-40000 in today's money would be 'comfortable'.


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## Judd (6 June 2007)

I'm not really surprised at the statement.  It is probably not very different in 2007 compared with the AMP.NATSEM report of 2004 which is at this link

http://www.amp.com.au/group/3column/0,2449,CH8799%5FSI3,00.html

Of course, one must be cautious when a financial/retirement income provider issues such reports as there may be an underlying agenda but taking the matter at face value, very few of those "soon to be retired" will be well off depending on the definition you apply to well off.

In our case, the child bride and I have estimated that our retirement income, if we decide to pull the plug at 55 (we are 48 & 46 respectively) will be about $75k pa.  However, who knows what will happen in the next 7, 10, 20 years.

PS: This estimate is probably less than what would have occurred if I had not been made redundant but that's the way life goes.


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## GreatPig (6 June 2007)

A few years ago I went to a financial planner (one of those free intro sessions my bank kept pestering me about) and before going, filled out a living expenses form to get an idea of how much we spend (filling out that form was probably the only useful thing about seeing the financial planner).

As Silence indicated, I came out with $30K+ pa as our current lifestyle cost (this was in 2003 or 2004 from memory). So around $40K pa in today's $ should do the trick.

GP


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## lazydays (6 June 2007)

Don't forget such factors as being completely debt free. Owning your own home with little maintennance requirements and possibly owning a car in good condition.
I'll definately have to "downgrade" the family home when the time comes. Meanwhile I'll reap the tax free capital gains on a large family home.
I'm also thinking about (back of envelope stuff) of selling the family home at the time and put all the the money into super and renting.
No maintenance, no rates etc. Cons are rents going up etc.
My aim is to have $1 left in the bank the day after I die. (insert cyrstal ball here)


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## nioka (6 June 2007)

lazydays;166294
My aim is to have $1 left in the bank the day after I die. (insert cyrstal ball here)[/QUOTE said:
			
		

> A great idea but what if you don't die on time. Say a new medical breakthrough gives you a few more years and you are penniless in an unsympathetic world ?


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## tech/a (6 June 2007)

GreatPig said:


> As Silence indicated, I came out with $30K+ pa as our current lifestyle cost (this was in 2003 or 2004 from memory). So around $40K pa in today's $ should do the trick.
> GP





So you expect say 25 yrs of retirement before you make your kids wealthy.
*What do you think that $40K a year will buy in 10 yrs time let alone 25?---*or more if you retire earlier?

Way off the mark in my view.
I personally think you need to have passive income/s which will rise with inflation throughout your retirement keeping you level with cost of living.
Anything less and you'll end up struggling!


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## jet328 (6 June 2007)

tech/a said:


> I personally think you need to have passive income/s which will rise with inflation throughout your retirement keeping you level with cost of living.
> Anything less and you'll end up struggling!




Totally agree. You've got to allow for living longer and cost increases. I have no doubts there will be some huge medical breakthroughs over the next 20-30 years. These breakthroughs will be increasingly expensive and less likely to be govt. funded like they are now.

If I was aiming to have a $40,000 income, I'd aim to have 1mil invested.
The dividends of around 3-4% would provide income and increase (with increasing profits) with the cost of living. It also means you are not drawing down and if something comes up you can dip into the capital gains

Cheers


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## Julia (6 June 2007)

tech/a said:


> So you expect say 25 yrs of retirement before you make your kids wealthy.
> *What do you think that $40K a year will buy in 10 yrs time let alone 25?---*or more if you retire earlier?
> 
> Way off the mark in my view.
> ...



Tech, I did say in today's dollars.  Personally, I'd find $40K p.a. quite enough - there's no mortgage or rent, I don't need designer clothes or a new car every year etc.

My accountant was telling me about a client who was a multi, multi millionaire.  She asked the client how much income he wanted to generate before considering donations to charities.  The client's answer:  $12,000 per annum!!!


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## astroboydivx (6 June 2007)

I want $100 000 a year in income for my retirement. That can be rents from IP's, dividends from shares, and drawing down some capital gains (see: living off equity http://www.invested.com.au/76/ )

I want to travel the world and eat in classy restaurants. But most importantly, I want the security of knowing that if I get cancer or if any other issue pops up I'll have the financial resources to take it on.


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## ghotib (7 June 2007)

Don't know that I'd believe a bank's figures on anything much 

This page on the Australia Institute website has a link to a paper on Baby Boomer Retirement. It's a PDF and it's pretty long, so you might prefer to print it out if you want to read it in full. Can't claim I did, but I found the summary sections interesting. 

http://www.tai.org.au/index.php?option=com_remository&Itemid=36&func=select&id=3&orderby=2&page=2

Julia, is your avatar your beautiful shepherd girl? What a stunner!!

Cheers,

Ghoti


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## Julia (7 June 2007)

ghotib said:


> Don't know that I'd believe a bank's figures on anything much
> 
> This page on the Australia Institute website has a link to a paper on Baby Boomer Retirement. It's a PDF and it's pretty long, so you might prefer to print it out if you want to read it in full. Can't claim I did, but I found the summary sections interesting.
> 
> ...



Hi Ghoti,

Thanks for your comment about the avatar.  It's Carla, my beloved previous girl who died suddenly at only six years of age.  She was as beautiful in nature as she was in appearance.  I miss her very much.

Regards
Julia


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## WCaswell93 (7 September 2021)

with historically low interest rates, bond funds have a significant risk.  If interest rates go up, the net value of your bond fund will go down.  If interest rates were more in line with historical averages, bonds might be lower risk.  Today, I think bonds are more risky than a low-cost index stock fund.


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## qldfrog (8 September 2021)

WCaswell93 said:


> with historically low interest rates, bond funds have a significant risk.  If interest rates go up, the net value of your bond fund will go down.  If interest rates were more in line with historical averages, bonds might be lower risk.  Today, I think bonds are more risky than a low-cost index stock fund.



Nice resurrect that thread @WCaswell93 , interesting to see old post from Mr @tech/a ..
Agree with you, i am currently liquidating some of my bonds to reduce them to much smaller portion.
In 2021, bonds even the Australian inflation indexed ones are not that conservative.paper gold and silver, cash for this money


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