The biggest myths of retirement

When Laura was 50, she didn’t know what to think about retirement. “One part of me was eager to stop working

When Laura was 50, she didn’t know what to think about retirement. “One part of me was eager to stop working and just put my feet up. But the other part of me was terrified,” Laura says.

“I was scared that my savings were not going to be enough to sustain me and I wasn’t sure what the right time would be for me to downsize.”

“Looking back, I realise that retirement is nothing like I ever imagined. I think that no one will have an accurate idea. It’s something you would have to experience to understand completely,” Laura says.

Laura wasn’t the only one affected by retirement myths. In fact, these myths about the golden years are causing unnecessary worry for Australians and the misinformation is scaring people.

Here are some common myths surrounding retirement:

1. I will spend less when I’m retired

Sure, your house may be paid off by then, and you will no longer have to shop for working clothes or pay for the daily commute. But the truth is, many people end up spending more than they expect during their golden years.

You finally feel like you have the time to do all things you’ve ever wanted like travelling, spending time with the family, coffee with friends, learning a new skill or picking up a new hobby – and those things need money.

And lets not forget medical care or things like physio, counselling and health programs to keep you fit as a fiddle. At least, you’ll enjoy the senior discounts on public transport, movie tickets, meals, and even property taxes.

2. I won’t be eligible for a health card

Many mistakenly think that their assets will make them illegible to get the Commonwealth Seniors Health Card. But according to Goldsborough Financial Services director John Oliver, the health card is tied to an income test – rather than an assets test. Retirees earning less than $80,000 as a couple or $50,000 for a single would be eligible.
He says there is a lot of misunderstanding about other pension rules and thresholds, when in reality a couple can have $700,000 of assets and still receive about $17,000 a year of age pension.

3. I need $1,000,000 to retire comfortably

Money Morning reports, The Australian Institute of Super Funds, and AustralianSuper, say it’s a myth that you need $1 million in superannuation for a comfortable retirement. Apparently, this figure has been distorted and inflated by people and industry bodies who have vested interests in maximising funds under management. According to a paper, with a super account balance of less than half that recommended $1 million, a couple could just about live comfortably.

4. I’ve got Centrelink to back me up

It’s great that we have Centrelink but did you know that the maximum Centrelink age pension and pension supplements, pay about $22,000 to a single and $33,000 to a couple? Can you afford to live on that?
“You can’t rely just on Centrelink – $33,000 a year for a couple is a reasonable starting point but not many people in this day and age can live on that,” Theo Marinis told
“The standard of living of the Baby Boomers has increased.” Most new retirees today have some sort of superannuation nest egg to supplement their pension payments.

5. I’m going to have so much time doing nothing

Don’t look at retirement as a punishment. Yes, you won’t be work-busy but you do have a lot of things that you can do like travelling, spending time with family, enjoying a new hobby or pursuing an old one. The choice is yours and the key is to keep connected and keep active.

What are some of the myths you’ve discovered?

  1. My hubby passed 18 months ago . I was his carer for 10 years he was on dialysis . Now I have nothing to do nothing to strive for ,life is just floating not good .

    • Pam  

      Cheryl maybe you need a period of ‘floating’ at the moment. When I found myself feeling this way I asked myself what did I wish I had more time for when I was working? Many ideas and activities presented themselves (which I do) and sometimes it’s just nice to watch the sunset (be quiet and calm).

  2. Frank  

    if you have not developed interests/hobbies outside of work, you may well be depressed when you stop work

    many feel they don’t have enough money to enjoy life – but that’s a sad reflection if you have always felt you need to spend money to enjoy anything

    I have been mocked for decades for my frugality – but now I have enough to retire whenever I feel like it – most of my colleagues who mock my frugality don’t have enough and can’t see themselves ever having enough to retire – do you see any connection ?

    Warren Buffet – one of the richest people in the world – was famous for dining frugally – once a week at his local $10 steakhouse – so you don’t need to spend money to be rich – quite the opposite – people wearing shiny new suits driving shiny new cars may look rich but are often not – they’ve spend all their money and they’re in debt – the millionaire next door in shorts, t-shirt and thongs, driving an old car – is typically not noticed because they haven’t spend their money – they have it in the bank !

    I choose free entertainment – tonight I’m going to a free university talk where there will be free wine and cheese and snacks – I’ll fill up there – and learn something of the latest intellectual developments at university as well

    Free parks, sunshine, libraries, public talks, public fireworks, public events – are all around – get some free exercise by walking from one to the other – and you won’t need to spend a penny !

  3. Geoff Dixon  

    Try living on one half of the married rate, my wife 65 no aged pension for another 7 years, I support us both on this amount of $658 per fortnight from Centre link you think a single pension isn’t much I could support two people on this and still have some change left

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