It’s a common assumption among our generation that the older we get, the less we are likely to spend. We know that’s not really the truth.
The big questions of “will our savings last us for the rest of our lives?” and “how much will I need to live my life comfortably?” are increasingly important.
The truth about money in retirement is that while the cost of living lowers in some of our consumer items, our health care and housing expenses can rise significantly. This reality of ageing must be very carefully considered in your retirement plan, with extra leeway allowed for unexpected changes to your health situation.
Here are some of the most effective strategies to give your retirement savings the breathing space it needs, and help you be more prepared for the years ahead.
Research how much you really need to retire
If you are just entering retirement, Industry SuperFunds’ Retirement Needs Calculator is a very effective starting point for understanding just how much you’ll need for the lifestyle you want – and whether or not you have room for major living changes.
This helpful step-by-step process will give you a projected estimate of how much you need to maintain your preferred standard of living, and the ways you can accomplish it. Click here to get started.
If you find yourself needing more to accomplish this goal, or if you are only just making the required amount, some long-term changes to your strategy will be required. This is where your super fund will be able to help you find peace of mind.
A retirement income stream will allow you to draw down in small regular intervals, leaving the majority of your savings invested in super. By controlling the rate you access your savings, it will be easier to get a clear, big-picture outlook on your future finances.
For further perspective, most super funds will offer financial advice (either free general advice or a dedicated financial advisor) to help you better understand your options.
Find ways to add extra money to super
There may be additional ways to find more today for the years ahead.
Industry SuperFunds have an enormously useful calculator to find extra money for your super. This easy tool can help you minimise everyday expenses and determine whether or not the government can lend a helping hand with co-contributions. Click here to use the calculator.
Know what financial incentives may be available to you
If you find yourself requiring extra medical care and support to maintain your independence, government subsidies can accommodate these increased needs on top of any existing age pension.
For example, if an illness meant you required more help at home, you could be eligible for a government-subsidised Home Care Package. Depending no your needs, this can allow between $21.71 – $132.01 per week for a carer to offer support at home, with additional supplements available based on specific medical requirements.
There are also dedicated Age Pension supplements that can help eligible pensioners – even those receiving a reduced-rate pension – cover household costs and daily living expenses. Click here to learn more about the Pension Supplement.
A financial advisor will be able to walk you through the ways you can use potential additional subsidies and supplements alongside your pension – and time it around current and future health concerns.