/, Superannuation/My Comfortable Retirement

My Comfortable Retirement

  

By Mark Teale

What does this mean?

Every three months, an organisation known as the Association of Superannuation Funds of Australia (ASFA)  produces research providing details of how much a person needs in retirement to fund a comfortable lifestyle. The research is very comprehensive – documenting a detailed “comfortable budget” outlining how much a couple can spend on food, entertainment, clothing, travel, health, transport etc.

From this research, based on this comprehensive budget, a couple looking for a comfortable lifestyle in retirement need superannuation of $640,000 to support an annual income of $60,457.

No doubt, living a comfortable lifestyle in retirement will mean something different for everyone, and for some couples $640,000 will be an adequate amount, however for me, I am not sure that this amount is enough.

Why do I believe that this amount is not enough?

Let me try to explain before people start to think that I am being a little greedy wanting more superannuation and funding in retirement.

Firstly, I do believe an amount of $640,000 would be enough to support my ongoing living costs which would be adequately covered by an amount of $60,457 per annum as per the research, however, I have some definite ambitions for the first couple of years of my retirement which will require capital in addition to the superannuation required to support the annual income.

This additional capital I am going to call my “slush fund”.

So how much do I think I need to have in my slush fund?

To ensure that I decide on an amount that will be adequate, I have done my own research.  I will ask that you do not judge me for my openness in discussing my ambitions and the costs.

Like all good retirees, I will become a grey nomad and travel around this wonderful country for maybe a year.  This sounds reasonable and not overly expensive.  Of course, the cost of this nomadic journey does depend very much on your mode of transport.

My choice of transport will cost close to $175,000.  This is the cost of a large motorhome, with its own shower, toilet, kitchen, power source and powerful diesel motor.  Why such a large vehicle?  I may be a grey nomad but my partner Donna, my dog Scout and I all want to be comfortable on those days when the weather is not kind, the facilities available are not all that nice and even though I may be a nomad I still do like a little bit of luxury.

The good news is that my plan also entails selling the motorhome after 12 months of wandering around Australia. These sale proceeds will fund the next ambition – living overseas in either Italy or France – for a least 6 months or if possible 12 months.  I would like to experience all the seasons from winter through to summer.

The costs, average rent for a small farmhouse in this region is approximately $1600 per month, purchase of a second-hand car close to $5,000, an expensive part of this operation is the transportation of Scout (the dog) to France or Italy and then the drama of bringing her home. The good news is that quarantine in Australia would be for 10 days only, not the previous time frame of 30 days.

This overseas retirement experience, not accounting for the living expenses, will require close to $35,000 in capital.

Now the point of the blog is not to talk about my plans in the first few years of my retirement but to say a comfortable retirement is different for everyone.

If I were to accept that all I need is $640,000 by the time I finish my travels this amount of money would be substantially reduced and would certainly not support the required yearly income of $60,457.

So, it is important that before you start your retirement make sure you know what your goals and ambitions are in retirement and understand how much they will cost and how much extra cash you need to have in the “slush fund” to cover the goals and ambitions without diluting the funding you have put aside to cover your living expenses.

For any of our readers who have had experience living overseas or travelling around Australia and are able to offer any advice, I welcome your thoughts

Contact Us
  • Tax Planning Time

Tax Planning Time

May 23rd, 2018|0 Comments

Tax Planning Time With the end of the 2018 approaching, it means tax planning time is upon us. We would like to draw your attention to some things worth considering as part of [...]

  • My Comfortable Retirement

My Comfortable Retirement

April 11th, 2018|1 Comment

My Comfortable Retirement    By Mark Teale What does this mean? Every three months, an organisation known as the Association of Superannuation Funds of Australia (ASFA)  produces research providing details of how much [...]

Compass Financial Solutions Client Review Damian

“During the period that I have been dealing with Graham and the team at Compass Financial Solutions I have found that all of my meetings have been made easy by there friendly personalities. Everyone is polite and professional, and always willing to provide answers to questions, no matter how complicated or minor the matter might seem.”

Damian Webb, Coastline Insurance
Compass Financial Solutions Client Review Jason & Amanda

“Compass Financial Solutions provided all the information we needed to make an informed decision to protect our family. I am confident that we have obtained the best advice for our needs”

Jason & Amanda Gemmill
Compass Financial Solutions Client Review Joan

“Arriving from Melbourne in 1994, I looked for the best Accountant in Caloundra and Wardle Partners were recommended to me. Since then, they have guided and advised me through the purchase and sale of residential and investment properties, the share market, a retail business and finally superannuation. Wardle Partners and Compass Financial Solutions support and encouragement enabled me to have the confidence to follow my dreams. I could not have done it alone.”

Joan Kalwig
2018-05-02T03:21:07+00:00 April 11th, 2018|Retirement, Superannuation|