How much money per week do you need to live on?

[Bill M]

I was browsing a website called "Super Guide" and an article with the headline "How much super is enough" came up. I asked a few of my friends how much they thought they would need to live per week without working and got varying opinions. Some said they could live on $500 a week, others said they need $1200.

So my question is a very simple one. How much money do you or you and your partner need per week to live on? The situation I would like you to imagine is that you own your home outright and you have no debts at all. You have no kids or they have moved out. Just you or you and your partner/spouse.

I'll start the ball rolling, my wife and I live comfortably on $800 a week net after tax. That's about $41,600 P/A. With that we can even do a cheap overseas holiday each year and a trip somewhere in OZ. So how much do you think you would need?

As a guide line of what the "Super Guide" site says I post the following info, I guess for my wife and I we are between the modest and comfortable lifestyle:

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Basic lifestyle (Age Pension only — $18,619 a year, or $28,070 for a couple, including pension supplement, as at 20 September 2010). The single Age Pension now represents 27.7 per cent of Male Total Average Weekly Earnings. Are you willing to live on 27.7 per cent of an average Australian’s income? Living solely on the Age Pension gives you a basic income and access to discounts on health services and energy costs. While this figure is an amount you can survive on, many Australians don’t expect to live within this level of income by choice. (The Age Pension is adjusted every six months, with next adjustment on 20 March 2011, and then 20 September 2011).

Modest lifestyle ($21,132 a year, or $30,557 for a couple). Receiving an after-tax income that is slightly higher than the Age Pension obviously gives you a better lifestyle than living solely on social security, but you can only afford low-cost activities.

Comfortable lifestyle ($39,302 a year, or $53,729 for a couple). Living on this level of after-tax income means you can enjoy more recreational activities. Also, you can afford to purchase private health insurance, higher quality household goods and travel regularly. Even so, a ‘comfortable’ lifestyle isn’t outlandish

Link to article here: http://www.superguide.com.au/superannuation-basics/a-comfortable-retirement-how-much-super-is-enough

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[basilio]

Good idea for a discussion. Can't really offer a cogent comment yet but one principal should be that controlling costs as far as possible, finding sensible ways to meet ones needs and not being sucked into high cost/high maintenace living would let us live well but relatively cheaply. All fairly obvious but I think these are deliberately overlooked by financial advisors who want to see us throw in buckets of money to fund a "comfortable" lifestyle while tipping plenty of commisions their way.

I also think that it is very unlikely that most people will have the $1m plus super portfolio that might theoritically, on a good day... finance the comfortable lifestyle proposed by super fund salesmen. So perhaps the clever approach is having a serious look at developing an effective, comfortable but modest lifestyle.

 

[pixel]

"Comfortable" at $1000 a week? Including regular travels? They've got to be joking!

I'm also dismayed at the implication that only "comfortable" includes private health insurance. Having in my social sphere a number of pensioners that rely on the public health system, I know how sickening a prospect that is

Another worrying aspect is the rising cost of living: Those who rely on the pension only will be "compensated" - most likely by just some official percentage that pushes them lower and lower, compared to AWE. But what about Self-Funded Retirees? Many of us will have to eat into their capital in order to live "comfortably". Who is compensating them?

But not to worry: By the time the carbon tax has cleaned up the environment, most of us will have dropped into the lowest level, without private health insurance, so we'll die a lot sooner and needn't worry anymore.

 

[prawn_86]

Our current situation is this:

160pw food (we eat extremely well)
120pw bills (utilities etc, i guess this would be higher if we owned a house)
200pw each for spending/misc

At the moment on top of that we are also savig for a wedding, travel and 'assets'.

This means we could live on $700pw no sweat, but it wouldnt include any holidays etc. So if we owned something outright i think 1k a week would be comfortable

 

[Glen48]

So you don't own a house and you don't pay rent??

 

[onthesword]

We wondered about this too as retirement is close, we have been salary sacrificing for a few years to see how much we could live on and for the past 3 years it has been 30k pa. We do all we want to as well as have 2 ten day and 1 three week (aussie) holidays per year. We can actually save a few $ as well.

 

[prawn_86]

So you don't own a house and you don't pay rent??

The opening posts asks to assume house owned outright and no other debt

 

[trainspotter]

Our current situation is this:

160pw food (we eat extremely well)
120pw bills (utilities etc, i guess this would be higher if we owned a house)
200pw each for spending/misc

At the moment on top of that we are also savig for a wedding, travel and 'assets'.

This means we could live on $700pw no sweat, but it wouldnt include any holidays etc. So if we owned something outright i think 1k a week would be comfortable

I would require at least 150k nett per annum to live the lifestyle of my choosing.

 

[Glen48]

Pawn
ok must be old eerrr whats that again??
Me rent $75 a month food $25 a week power $35 a month water $3 a month . no car ,phone rates insurance beer $1.2 a litre
Still think accomadation should be included to get an idea what is being paid out

 

[inq]

Partner and I could live on say $500 a week, but I wouldn't define that as 'living'.

Our financial plan on the other hand is on track for $180k/P.A. Now that allows for living.

 

[Julia]

The opening posts asks to assume house owned outright and no other debt

If you have a house owned outright you are still going to have to allow for rates, water, maintenance, and insurance. Just as an example, I allow around $5000 p.a. to cover these. It's naive to imagine that just because you don't have a mortgage or don't pay rent, you have no ongoing expenses in relation to where you live.

Re how much any of us need to live on, obviously it depends on what sort of existence you lead. e.g. TS says he needs $150K. I wouldn't know what to spend that much on.

I don't know how anyone can live on a government pension, let alone the unemployment benefit, but people do. So presumably if income is simply not available one just has to modify the wants, and even do without some of the needs.

I think it also depends on the sort of financial philosophy you have practised for most of your life and that this is pretty ingrained by the time retirement looms.
Some of you might remember my deciding last year that it was time to be a bit self indulgent with an expensive car. Did all the research on BMW, Mercedes et al, tried hard to talk myself into going ahead, but in the end just couldn't justify to myself what 'felt' wasteful, given I drive about 1000 kms a year, have the dog in the car for much of that shedding hair and drooling down the windows. So bought a second hand station wagon for a changeover of just $15,000 and am entirely happy with that decision.

Depends also on whether you want to travel a lot. I don't, after spending much of my working life travelling.
Any travel, though, has to be business class and top standard accommodation. I do want comfort on a day to day basis, so have pretty expensive pool heating/cooling, and buy good food.

Living in a large city probably means one would spend more on clothes, in contrast to being in a regional or country area where being on the beach or the garden hardly requires haute couture.

For this thread, I've just added up what I spent last FY and it was about $35,000.

Actual income exceeds this quite a bit so I do save.

 

[medicowallet]

120pw bills (utilities etc, i guess this would be higher if we owned a house)

120pw bills (utilities etc, i guess this would be higher if we owned a house)

This seems extremely low.

Water
Electricity
Gas
Phone
Internet

Then also
Car rego
Car servicing
Car insurance
House contents insurance
Private health cover
Stuff happens expenses
Incidentals

I'm sorry, I keep excellent records, am extremely proactive in every 3-6 months looking for the best deal, and still can not get anywhere near $120.

 

[tech/a]

To be honest I wouldnt have a clue.

 

[prawn_86]

I'm sorry, I keep excellent records, am extremely proactive in every 3-6 months looking for the best deal, and still can not get anywhere near $120.

We both put $60 pw into a seperate account for our bills.

It covers:
Home Phone
Internet
Power
Gas
Car Fuel
Car Repairs
Few random bits and peices but nothing major

Doesnt cover:
Personal mobiles
Major unexpected expenses

Dont have:
Any form of insurance aside from third party property on the car
Private health

So only thing i am missing is rego, which i forgot about as my old man pays it as an xmas present each year. So add that on.

The total figure i quoted would be a minimum we would be able to live on but our bills are around 6k a year (120pw).

Off the top of my head bills are as follows:
50pm internet (includes voip calls) = 600 pa
20pm phone line rental = 240 pa
350pq power = 1400pa
150 gas pq = 600 pa
40pm fuel = 480 pa
car repairs/servicing 1000 pa

 

[aubooker]

never wish to know where to spent my money...whats the point

 

[sptrawler]

I am not at retirement age but will retire before 60 a couple of my collegues retired pre 60 and they both live a comfortable life (own everything). They both say that $30,000 is a minimum and $50,000 gives you a comfortable lifestyle with an overseas holiday. So allowing for inflation of 10% and the occasional drawdown of say $20,000 every 5 years or so .
One would think an amount of approx $1m should see you have a trouble free retirement. Lets not forget part pension and health care cards start to kick in as the capital falls, if indead it does.

 

[Bill M]

not being sucked into high cost/high maintenance living would let us live well but relatively cheaply.

Hi basilio, that's one of the reasons we moved out of our unit and into the house. The levys were quite expensive, like $75 per week. That's about $3,900 P/A. Our house has cost us only $400 for maintenance for 18 Months. I know that eventually fences and water heaters will need to be replaced but the costs are no where near some of the outrageous levy fees some strata blocks charge.

"Comfortable" at $1000 a week? Including regular travels? They've got to be joking!

They must mean Australian based holidays. You certainly could go to Europe even twice on that sort of money, maybe once with some hard saving.

Another worrying aspect is the rising cost of living: Those who rely on the pension only will be "compensated" - most likely by just some official percentage that pushes them lower and lower, compared to AWE. But what about Self-Funded Retirees? Many of us will have to eat into their capital in order to live "comfortably". Who is compensating them?

Fear not, when you start running low the part pension can kick in, yeah I know it's not much but it's better than nothing, I fear inflation too.

 

[Bill M]

We wondered about this too as retirement is close, we have been salary sacrificing for a few years to see how much we could live on and for the past 3 years it has been 30k pa. We do all we want to as well as have 2 ten day and 1 three week (aussie) holidays per year. We can actually save a few $ as well.

I agree, my wife and I can do it for that too. It's just that we go overseas as well and therefore requires the extra $$$, cheers.

I would require at least 150k nett per annum to live the lifestyle of my choosing.

Hi trainspotter, I know I shouldn't ask.... but now I am so curious, what costs 3 grand a week when you have your own home and no debts and no kids? I could eat steak and drink champaign each night and still have $$$$ left after it with $800 p/w. Just tell me to shove off if it's personal.

Pawn
ok must be old eerrr whats that again??
Me rent $75 a month food $25 a week power $35 a month water $3 a month . no car ,phone rates insurance beer $1.2 a litre
Still think accomadation should be included to get an idea what is being paid out

Glen, your circumstances are different, you live in the Philippines and as far as I know you can't buy property there in your name (could be wrong) so in your case it is fair to include your Monthly rental as well.

 

[tech/a]

Dont forget inflation it will be a killer to most who think they have "enough"

Passive income/s is/are a must.

 

[Bill M]

We both put $60 pw into a seperate account for our bills.

I'll give you my running costs, 2 people in a house. My answers are in Blue.

Off the top of my head bills are as follows:
50pm internet (includes voip calls) = 600 pa
$720 pa

20pm phone line rental = 240 pa
Nil but we need 2 Mobiles$240 pa

350pq power = 1400pa $710 pa

150 gas pq = 600 pa $400 pa

40pm fuel = 480 pa $4,800 pa

car repairs/servicing 1000 pa Same $1,000[/QUOTE]

Mine comes in at about the same as yours, $150 Per Week. Only reason why mine is higher is the frequent travel by car to Sydney, more petrol.