NewsNew Podcast Series: How much money do you REALLY need to retire?

New Podcast Series: How much money do you REALLY need to retire?

When you read about a ‘magic number’ that you’ll need for a comfortable retirement, does it sound right to you?

Is your number the same as your friend’s or neighbour’s, or should it be different?

In this first edition of the FiftyUp Club’s new podcast series, we ask ‘How much money do you REALLY need to retire?’

Christopher Zinn speaks to Grattan Institute CEO John Daley, a critic of the superannuation industry’s claim that Australians need a precise amount for a ‘comfortable retirement’.

Daley is a straight talker.

On the idea of a ‘magic number’: “I think this is one of the biggest problems in retirement incomes, is that people want a magic number.”

On the super industry’s agenda: “We think that this is an area that has been bedevilled by interests which, frankly, make more money when you put more money into your super account.”

On what you really need in retirement: “We want your income to be roughly comparable when you're working and when you're retired.”

And on our generous super tax concessions: “In an ideal world we would start taxing earnings on super more than we do.”

Listen to the whole podcast and share your own thoughts in the comments below.

Any advice contained in this article is general in nature and does not take account of your particular objectives, personal circumstances or needs. If in doubt about your own situation you should seek appropriate advice.

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New Podcast Series: How much money do you REALLY need to retire?

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Anonymous from NSW commented:

You need a lot more than you did 5 years ago when the government halved the assets a retiree could have before being entitled to any sort of government benefit, even a one dollar pension. With the state of the economy it is impossible to get any sort of return on shares or interest rates which will lead to governments getting what they deserve. Many more self funded retirees ending up on full pensions. 

Pamela from NSW commented:

What I would like as a self funded retiree is the same pensions that the Politicians get for at the moment doing nothing. What a shame that this country is not equal. The Goverment Employes fortunate enough to be paid the Com Super were the fortunate ones as they knew exactly what they would retire on until the day they pass on leaving half to their spouse as long as the were alive. The Government cancelled this Super as I guess they found out it was costing too much and replaced it with another that obviously not expensive. I am one of the fortunate ones that like others have worked hard with my husband get nothing in pension from the Government so save them money but can afford to live comfortably only because we had a few investments that we sold to make our life comfortable. I really do not know how much money you need to retire on but as long as you have just enough to pay your bills which are high and a couple of holidays a year I guess you are well off compared to some. If we only knew when that date on your forehead was going to come. Your health is your wealth as well. 

Simon from VIC commented:

What amazes me about this interview, is the Grattan Institute thinks that pensions paid out of government incomes is sustainable on the level it is. All his proposition is on current pension levels.... When the pension first started in the 40’s there were something like 10 taxpayers for every retiree, and they lived on average around 5-7 years. Now we have around 4-6 taxpayers (not sure where it’s at now, but it’s constantly getting worse) for every retiree, and they’re now living on average 15 years... Do the math... Labor started superannuation as they saw the writing on the wall.... 9% isn’t enough to help the government fix the cost problem. 

Anonymous from VIC commented:

John Daly the golfer for Grattan Institute CEO, maybe - yes? 

joy from NSW commented:

When in retirement should you insure your super, or is it insured with the super company at the time. 

Robert from VIC commented:

Just recently our financial adviser contacted Centrelink to update our finances with them The share market late last year went down by the day and so did our part aged pension. As a consequence, our part pension went up quite a bit per fortnight. This week we have received our house and contents insurance and our Medibank Private health insurance increases both for the next twelve months. Just those two alone, the increase in the fortnightly part aged pension we receive has been wiped out. It is becoming more and more difficult to make ends meet now. The drought has pushed the price of food up quite substantially, not that we go over board when we shop each week. Such increases are hard to budget in each month. We are stay at homes now as that nice two-weeks holiday is becoming a bit of a dream. 

Anonymous from WA commented:

Deliberately misleading but not unexpected from the Grattan Institute. Daley says that of retirees they enjoy a higher income today than they did when they were working 20 years ago. Surprise surprise, everyone has a higher income today than 20 years ago. Everyone must have to meet rising cost of living. The basic pension rate in 2018 is 325% higher than in 1998. Maybe Daley is a supporter of Shorten's hit on retirees and tries to help Shortens case for higher taxes on retirees. 

Anonymous from QLD commented:

Could not agree more with a Frank from Qld.......expenses in retirement like everyone else’s goes up. Health Care is one of the biggest expenses and even with private cover you are out of pocket quite significantly when you use it. Doctors are topping up their income from those with health cover. We saved hard and gave up up on things prior to retiring in order to have some enjoyment after a life of work however, as Frank says you certainly need to have spare money for those expenses that continue in retirement. We based our retirement on having 80% of working income for 12 years then 70%. V of Qld 

Frank from QLD commented:

Ok for the 20% or so with two working partners, been retired for a while,now i find car is 11 yrs old caravan 29 ys old you dont have the capital to buy new,plus health care costs are starting to kick in, just recently wife had MRI scan done ,not covered by medi care as recommended by a Dr not specialist ,these are costs where you need more than income,you need spare money in the bank,i could go with further expenses, so it is not all about income weekly,you need plenty of money for these future expenses, Thanks Frank from Urraween Qld 

alex from QLD commented:

After retirement none of our bills have decreased and we still are independent . The premise that the required income is less is false unless we have a miserable retirement like one phone, one care, no Foxtel, no trips etc. We are self funded. The income required is the same as before retirement to maintain our quality of life. We get no health card no rate reduction etc 

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