How much do you need to retire?
It’s those lifelong questions you ask yourself every now and then - can I retire now and can I do so comfortably?
You feel like you’ve worked enough 40-hour weeks and have enough bank to finally retire.
However, that may not necessarily be the case, with Super Consumers Australia (SCA) now saying that it’s only easy to retire if you’re a homeowner.
(Did you hear that? That was the sound of almost all Millennials crying.)
Xavier O’Halloran, the director of SCA, and his team looked into the Australian Bureau of Statistics (ABS) to find out just how one can “kickstart their retirement planning”.
“Our goal is to develop trustworthy retirement targets that give people a solid ‘rule of thumb’ on what they’ll need to save to maintain their standard of living in retirement,” he told Australian Broker.
The research found that an annual retirement income of $259,000 would be needed for a single homeowner aged 67. This is based on a fortnightly spend of $1,423.
But if you’re a couple owning a home at the same age, you will need $369,000 annually if you’re spending $2,115 in a fortnight.
If you’re feeling a bit more successful and want to retire a decade earlier, single homeowners would need $313,000 yearly if their fortnightly spend is $1,654.
Couple homeowners require $409,000 annually if spending $2,385 fortnightly.
On the other hand, for those not so lucky to own a home, the research found that there is an increase of financial hardship and income poverty.
This comes as older Australians are continuing to work later in life to keep up with the increase in cost of living.
It is predicted more than 50 million people aged 50 and over will still be working by 2031.
“People chasing inappropriate targets can end up with a much lower standard of living if they over save or don’t spend down as much as they can afford in retirement,” Xavier said.
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