Putting a price on retirement |
The Age reports the cost of retiring to a life of good food and creature comforts has been put at $118 a week.
That is the amount a study has found that a 30-year-old couple earning $85,000 needs to save on top of their current superannuation to have a comfortable retirement.
A comfortable lifestyle includes eating out occasionally at an upmarket restaurant, owning a dishwasher, air-conditioner, computer, digital camera, buying newspapers and CDs and having private health insurance.
To afford this lifestyle, a couple who retired today were found to need an annual income of $43,350, while a single person would need $32,800.
A couple on $23,500 and a single on $16,930 would have a modest lifestyle. Based on current rates of savings, the Association of Super Funds of Australia, which carried out the study with Westpac, said this would include the vast majority of low and middle-income earners.
"The extra expenditure allowed in the shift from modest to comfortable adds a lot to the enjoyment of retirement,"the super association's chief executive, Philippa Smith, said.
"It's the difference between driving a four-year-old Corolla instead of an eight-year-old one, or having a glass of wine a couple of times a week with dinner instead of a glass of grape juice."
Only 20 per cent of current retirees fall within the study's definition of having a comfortable lifestyle.
The study confirmed earlier research by an investment funds group that found there was a $600 billion gap between what people expect they need for retirement and what they will get. Australians have about $534 billion set aside for retirement.
The study was released as the Australian Securities and Investments Commission warned that unscrupulous investment advisers have been urging people to dip into their superannuation, charging at least 20 per cent.
Commission executive director of consumer protection Peter Kell said the scam tended to target low-income earners who had difficulty paying their phone bills, credit cards or mortgages.
Under the scam, promoters convince people to put their savings into a self-managed superannuation fund, telling them that they, as trustee, can decide how the assets are spent. Mr Kell said in the worst cases promoters had actually stolen their client's super.
- with Josh Gordon, AAP
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