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What does a retiree in Australia typically spend their money on?

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In the grand scheme of human history, the concept of retirement is very recent. Only a hundred years ago, people simply worked, then died. Life expectancies were around 56 years for men and 60 years for women. Since that time, advancements in medicine and health care have seen life expectancy increase significantly. People now need to prepare for what could be over a third of their life spent in their retirement years. With the absence of a regular paycheck (although many of our clients do continue to work as a personal preference), this needs to be funded from either government age pension, personal savings/investments, or a combination of the two.

One question we are often asked is ‘how much do I need to retire?’. Our answer is always ‘that depends!’. With our clients we put in place a Next Chapter Roadmap, which details what is important to them, what lifestyle they want to achieve and what costs will be associated with that. This is important as it provides certainty that you can make the most of the efforts during your working life and enjoy your final chapter to the fullest, without having to worry about cutting back.

This article will take you through what an example client plans to spend in retirement. This is based on the annual Association of Superannuation Funds of Australia (ASFA )research into spending. We’ve included the figures for both a couple and a single person and only included what ASFA determine is a ‘comfortable’ lifestyle, which means eating out a bit more, occasional overseas travel, less worry about bills such as utilities. Figures are weekly and assume that you own your home without a mortgage.

For retirees aged 65-85 COUPLE SINGLE
Expenditure items Comfortable lifestyle Comfortable lifestyle
Building and contents insurance $34.61 $32.65
Council rates $41.18 $41.18
Water charges $24.71 $21.27
Home improvements $7.20 $7.20
Repairs and maintenance $21.60 $21.60
Total housing $129.31 $123.90
Electricity and gas $53.56 $43.19
Food – groceries and other fresh food $215.96 $124.25
Bundle of home phone, broadband, mobile $28.76 $22.09
Household cleaning and other supplies $26.47 $20.29
Cosmetic and personal care items $6.79 $4.85
Barber or hairdressing $24.03 $15.65
Media, including digital $8.86 $8.65
Computer, printer and software $5.00 $5.00
Household appliances, air conditioners, smart phone $17.37 $16.04
Miscellaneous $7.43 $7.43
Total household goods and services $95.96 $77.91
Clothing and footwear $50.54 $27.14
Car transport and running costs $168.15 $157.34
Public transport $5.14 $2.57
Total transport $173.28 $159.91
Health insurance $88.46 $44.22
Chemist $45.66 $26.28
Co-payment and out of pocket $58.99 $32.73
Vitamins and other over the counter medicines $5.67 $2.83
Total health services $198.79 $106.07
Membership clubs $6.04 $4.05
TV, DVD $1.20 $1.20
Streaming services (Stan/Netflix or like) $11.38 $11.38
Alcohol consumed or equivalent spent with charity or church $42.21 $20.22
Lunches and dinners out $86.57 $61.84
Cinema, plays, sport and day trips $10.07 $6.04
Domestic vacations $75.71 $49.75
Overseas vacations $33.21 $20.96
Take away food, snacks $28.28 $20.59
Total leisure $294.67 $196.02
Total weekly expenditure $1,240.83 $880.49
Total annual expenditure $64,771 $45,962

Something that we are all probably aware of is the fact that our spending habits can change over time. Consider what you spent your money on when you were an adolescent compared to now. This is no different when it comes to retirement. As you progress through your retirement years, from age 65-85 to age 85+, the allocation of funds to certain areas can often change. For example, you may find that:

  • More money is spent on health services (i.e., chemist and co-payment/out-of-pocket expenses), transport (i.e., public transport) and other expenses (i.e. home care services).
  • Less money is spent on transport (i.e., no longer holding a car) and leisure (i.e., alcohol and eating out, recreational activities, and domestic/international vacations).

Although difficult to contemplate, these changes can often be a reflection of age starting to get the better of your health. During this stage in your life, it’s important to give thought towards the options and the services available, which can ultimately help you continue to lead a productive and enjoyable retirement.

As with many things in life, there are certain unavoidable expenses that can frequently prove to be less of a financial burden on couples as opposed to singles. The simple rationale behind this is that these expenses can often be split (whether evenly or not) between two people as opposed to one. In terms of retirees and the table above, examples can be housing costs (e.g., home and contents insurance, rates, home improvements, and repairs and maintenance) or other expenses (e.g., electricity and gas, and computers and accessories). Because of this, you may find that a single retiree has a much higher allocation of funds to these unavoidable expenses, and subsequently a lower allocation of funds to other things, such as leisure and other expenses.

It’s important to remember that everyone has their own individual financial situation, goals and objectives. This means that you will undoubtedly have vastly different ideas and expectations around retirement in the post-work years when compared to the next person. For example, for some a ‘comfortable retirement’ might be an extra blanket in winter whilst for others it might be three months in a villa in Tuscany.

As such, in terms of answering the question of how much an Australian retiree spends in retirement, it really does depend on your own personal circumstances. So, probably more important and relevant questions are the following:

  • Unavoidable expenses aside, what would you like to spend your money on in retirement?
  • Are you currently on track to making this a reality for your post-work years?

Hopefully this will help people to start thinking about their retirement. After all, you’ve worked hard to get here. It’s important to plan for what could be the final third of your life, so you can finish strong.

As always, if there is anything in this article that you would like to discuss, or if you would simply like to know how you are tracking towards your goals and objectives, then please do not hesitate to book a time to have an initial chat with us – calendly.com/finishstrong/15min.

 

The information contained on this site is general in nature and has been prepared without considering your objectives, financial situation or needs. You should, before acting on any advice, consider its appropriateness to your circumstances (including your objectives, financial situation and needs). You should also consider the relevant PDS before making any decision about any product.

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Privacy Policy

Privacy Policy

1. Introduction

1.1 Count Limited and its related bodies corporate (collectively ‘Count’, ‘we’, ‘us’, ‘our’) respect your privacy and are committed to protecting your privacy. We understand the importance you attach to information that identifies you (your ‘personal information’) and we want to help you protect it.

1.2 We are bound by, and committed to supporting, applicable privacy legislation including the Privacy Act 1988 (Cth) and the Australian Privacy Principles (APPs). This Privacy Policy (‘Policy’) explains how we collect, hold, use, and disclose your personal information that we may obtain when you submit information to us in person, by mail or email, or by visiting our website.


2. How do we collect and hold personal information about you?

2.1 We collect personal information from you in a variety of methods. Examples of how we collect personal information include: 

  • Through communications between you and our representatives or your adviser or accountant;
  • Your use of our website;
  • Completing application forms in relation to products and services;
  • Other avenues, where required to meet regulatory requirements and comply with the law;
  • When you apply for employment with us;
  • Through marketing activities which request information from you, such as surveys.

2.2 Because our products and services are often offered by intermediaries such as financial planners, solicitors, or accountants, we may collect personal information about you from these third parties.

2.3 You can deal with us anonymously or by pseudonym unless it is impractical for us to deal with you where you have not identified yourself or have used a pseudonym. We require certain personal information to provide you with services and information. If you do not provide us with certain personal information, we may not be able to provide you with access to those services or respond to your request for information.

2.4 We will only collect personal information from you where it is reasonably necessary for us to provide our services to you or to perform our functions or activities.

2.5 We will only collect sensitive information from you with your consent, except in permitted general situations which include:

  • The collection of the information is required or authorised by or under an Australian law or a court/tribunal order;
  • The collection is necessary to address a threat to an individual’s life, health, or safety; and
  • Permitted health situations.

2.6 We may hold your information electronically or physically and have in place appropriate data and physical security measures and protocols to protect that information from loss or from disclosure not contemplated by this Policy.


3. What type of personal information do we collect?

3.1 The type of personal information we may collect from you includes (but is not limited to):

  • Names, address, email, phone numbers, and job titles;
  • Information in identification documents such as your passport or driver’s licence;
  • Tax file numbers (TFNs) and other identification numbers such as Medicare number;
  • Date of birth and gender;
  • Financial information;
  • Details of superannuation and insurance arrangements;
  • Sensitive information (with your consent), such as health information or membership details of professional or trade associations or political parties;
  • Bank account details, shareholdings, and details of investments;
  • Educational qualifications, employment history, and salary;
  • Visa or work permit status;
  • Personal information about your spouse and dependants.


4. How do we use your personal information?

4.1 We will use the information you supply for the purpose of providing you with the service(s) agreed under our engagement and related services, such as accounting or business advisory services, or to meet obligations we may have at law, including in relation to health and safety.

4.2 We may also use the information we collect for our internal business and management processes (for example, accounting or auditing purposes), monitoring and improving our website, keeping you informed about our services and company news, and for any other purposes that would be reasonably expected by you and to allow us to comply with our obligations under the law.

4.3 We may also use personal information we have collected from you for the purpose of marketing our services. If you do not want to receive marketing material from us, you can unsubscribe by contacting us as detailed below:

  • For electronic communications, you can click on the unsubscribe function in the communication;
  • For hard copy communications, you can email us using the details in the ‘How to contact us’ section of our website informing us that you wish to unsubscribe http://www.count.au/Contact-Us.


5. How do we disclose your personal information?

5.1 Your personal information will only be disclosed:

  • To our employees, contractors, consultants, dealers, agents, or advisors as required to provide our services to you or for related purposes;
  • To suppliers and service providers (for example, accounting or auditing service providers or our website hosting service providers) in connection with our provision of services to you;
  • Where you have consented to the disclosure;
  • Where required or authorised to do so under an Australian law, court or tribunal order, or other governmental or regulatory body or agency;
  • In permitted health situations;
  • If we believe that the use or disclosure of the information is reasonably necessary for enforcement-related activities conducted by, or on behalf of, an enforcement body; or
  • In connection with an actual or proposed sale, reorganisation, or transfer of all or part of our business, including as set out in clause 16.1.

5.2 We may use, store, process, or back-up your personal information on servers that are located overseas (including through third-party service providers). The privacy laws in other countries might not be the same as in Australia. However, where we provide your personal information to third parties overseas, we will take such steps as are reasonable to ensure that your information is handled and stored in accordance with Australian privacy laws and this Policy. Currently, we use outsourced service providers in the Philippines, India, and Serbia.


6. Access to your personal information

6.1 You can request us to provide you with access to personal information we hold about you by sending us an email: privacy@count.au (no spam please) or writing to us at Level 1, 45 Clarence Street, Sydney NSW 2000.

6.2 We may allow an inspection of your personal information in person, or provide copies or a summary of relevant documents, depending on what is the most appropriate in the circumstances. Any charge we make for providing access will be reasonable and will not apply to lodging a request for access. Your request to access your personal information will be dealt with in a reasonable time.

6.3 Note that we need not provide access to personal information if a request is frivolous, or where to provide access would pose a threat to health or public safety, unreasonable interference with another person’s privacy, or be a breach of the law. If we refuse access, we will provide you with reasons for doing so.


7. Accuracy and correction

7.1 To enable us to keep our records properly, please notify us if you believe that any information we hold about you is inaccurate, incomplete, or out of date and we will take reasonable steps, in the circumstances, to ensure that it is corrected. You can notify us by sending us an email: privacy@count.au (no spam please) or writing to us at Level 1, 45 Clarence Street, Sydney NSW 2000.


8. Our security procedures

8.1 We take your privacy and the privacy of our associated entities and their clients very seriously. We will take reasonable steps in the circumstances to protect any personal information you provide to us from misuse, interference, or loss and unauthorised access, modification, and disclosure.

8.2 We will also deidentify and destroy the personal information we hold about you once our legal obligations cease. Our security procedures are reviewed from time to time and we update them when relevant.

8.3 Please be aware that the transmission of data over the internet is never guaranteed to be completely secure. It is possible that third parties not under our control may be able to access or intercept transmissions or private communications without our permission or knowledge. We take all reasonable steps, in the circumstances, to protect your personal information. However, we cannot ensure or warrant the security of any information you transmit to us. Such transmissions are done at your own risk.


9. Data breach notification

9.1 We are required to give notice to the Office of the Australian Information Commissioner (OAIC) and affected individuals of an “eligible data breach”. This means that if we hold personal information about you, and there is unauthorised access to or disclosure of your personal information, and if you, as the “affected individual” would be likely to suffer serious harm from this access or disclosure, we must notify both you and the OAIC.

9.2 “Serious harm” could include identity theft, threats to physical safety, economic and financial harm, harm to reputation, embarrassment, discrimination, or harassment. The test is whether a “reasonable person” would expect you to suffer serious harm.

9.3 If you are likely to suffer serious harm from a data breach, we will notify you of:

  • The nature of the eligible data breach (i.e., how the information was accessed or disclosed);
  • The type of information that was accessed or disclosed;
  • The steps that we have taken to control or reduce the harm, and those that we plan to take;
  • Any assistance we can offer you, such as arranging for credit monitoring;
  • Anything that we can suggest you can do to assist yourself or mitigate the harm;
  • Whether the breach has also been notified to the OAIC;
  • How you can contact us for information or to complain; and
  • How to make a complaint with the OAIC.

9.4 We will notify you using the same method that we usually use to communicate with you. If it is not practicable for us to notify you personally, we will publish the notification on our website.

9.5 There are some circumstances in which we do not have to notify you of a data breach. These include:

  • Where we have taken remedial action before any serious harm has been caused by the breach;
  • If you have been notified of the breach by another entity;
  • If notification would be inconsistent with Commonwealth secrecy laws; or
  • Where the OAIC declares that notification does not have to be given.

9.6 Depending on the nature of the breach and the harm, we may voluntarily inform other third parties such as the police or other regulators or professional bodies.


10. Identifiers

10.1 We will not adopt as our own any government identifiers you may provide to us such as TFNs and will not store these identifiers on any information.


11. Links to other sites

11.1 We may provide links to other sites for you to access. You should be aware that these other sites are not subject to this Policy or our privacy standards and procedures. You will need to contact them directly to ascertain their privacy standards.


12. Cookies

12.1 Our website may deposit “cookies” on a visitor’s computer. Cookies are pieces of information that a website transfers to an individual’s hard drive for record-keeping purposes. Cookies are only sent back to the website that deposited them when a visitor returns to that site.

12.2 Cookies make it easier for you by saving your preferences while you are at our site. We never save personal identifiable information in cookies. Most web browsers are initially set up to accept cookies. You can, however, reset your browser to refuse all cookies or to indicate when a cookie is being sent.


13. Changes to our Privacy Policy

13.1 From time to time, we may vary this Policy for any reason. We will publish any changes on this website.

13.2 By continuing to use our website and continuing to provide us with your information, you confirm your acceptance of these changes.


14. Complaints resolution

14.1 We are committed to providing a fair and responsible system for the handling of complaints from parties whose personal information we hold. If you have any concerns regarding the way we have handled your privacy, please send us an email at privacy@count.au or write to us at Level 1, 45 Clarence Street, Sydney NSW 2000. We will address any concerns you have through our complaints handling process and we will inform you of the outcome of your complaint within a reasonable timeframe.

14.2 If after receiving our response, you still consider that your privacy complaint has not been resolved, you may refer your concerns to the Office of the Australian Information Commissioner at www.oaic.gov.au.