How to save for the most enjoyable retirement
Australians need to start saving for their retirement early if they're going to have the most enjoyable time in their twilight years. That's the news out of an Actuaries Summit in Melbourne from 2015, as reported in a May 2015 article from news.com.au.
According to the report, retired couples will need up to $1.5 million in superannuation funds to live comfortably on the same income that a $70,000 salary would give them. So you don't have to stop living the way you want when you call it quits on your career, making sure you have enough money saved up is crucial.
What are the best ways to achieve this, and how can a Cohen Handler buyer's agent help you?
Why do people need to save for retirement?
In order to access a comfortable retirement, you'll need enough money to live on over $1,000 per week, according to the Association of Superannuation Funds of Australia (ASFA). Research states that for a couple living a comfortable lifestyle in retirement, expenditure would amount to $1,119.32 per week, or $58,364 a year. For a single person, those numbers came out at $817.07 per week and $42,604 per year.
In order to access a comfortable retirement, you'll need enough money to live on over $1,000 per week.
Living this way for up to 30 years requires a significant amount of capital. A couple that makes it to the age of 95 will have been living on just under $60,000 according to the above figures for 30 years. That's $1.8 million just to live. The data takes into account every expense, so even if you're planning on travelling, that's included. It's a serious ask for someone to save that much money in the course of their working life, though.
"People of 65, particularly those who haven't been privileged and only came into superannuation in the late 1980s, very few of them would have that sum of money," said Alun Stevens of Rice Warner at the Actuaries Summit, reported by news.com.au.
If you haven't started saving for your retirement now, it's a good idea to get going. As much as possible would be good!
What wealth creation options do you have?
According to a CoreLogic RP Data article from August 29, there are more than 3.5 million Australians over the age of 65 in the country. That's 15 per cent of the total population. And there are certain suburbs these people like buying in over others – some more cost-effective too.
There are 50 suburbs that have a population inclusive of at least a quarter over the age of 65. Suburbs such as Victor Harbour in South Australia (37.9 per cent) and Queenscliffe in Victoria (35.3 per cent) are even more popular.
Victor Harbour in particular is a very cheap option, although that doesn't take away from the quality of life experienced by the residents. CoreLogic suggests the median house value is just $357,293 and the median unit value is $267,049. Retirees can live in a great suburb surrounded by people in similar life stages without paying through the nose for it. Queenscliffe is a little more expensive, with a median house value of $747,547 and a median unit value of $487,492. Depending on what you want, and what your budget is, will determine where you can afford to buy.
In order to build wealth from an early age and ensure you have enough money for a comfortable retirement, investing in property is a great option. To get you into the best home for wealth creation, a Cohen Handler buyer's agent can steer you in the right direction. Not only that, but when it comes time to retire and move away from the big city, they can help you find the perfect retirement home as well.
A great investment property is always tenanted, offers sound rental yield and will provide excellent capital gains when you sell the home. How close it is to the CBD, what sort of amenities are included and the surrounding area are factors that will affect all three of these things.
A home closer to the city centre is likely to be more popular among people who work there, so will be in hot demand. If it's in a nice area, expect that demand to increase, and if it's well-stocked and taken care of, you'll never have trouble filling it with people or finding a buyer. On the other hand, a home an hour's drive from the city, surrounded by little to nothing in the way of shops or parks and cafes that is falling to bits will hardly ever have a tenant, and selling it for a gain in the future might prove impossible.
That's exactly the situation we can avoid at Cohen Handler, as our team of experts can help you find a home that will genuinely grow your portfolio so you can retire comfortably. We don't want you to buy a lemon and end up with less than you started with, struggling to make ends meet as a pensioner.
Don't let that happen to you. Get in touch with Cohen Handler today.