Many people are approaching retirement age and are terrified that they don't have enough money to retire, which means that they will have to fall back on the Age Pension. Which then sparks the fear inducing question, "How can I afford to live on the Age Pension?!"
The maximum Age Pension rate is currently $1,307 per fortnight per couple, which is outrageously lower than what most people currently spend, but is it enough to get by?
Let's have a look at a case study of what could be achieved with these figures, assuming an owned home (perhaps they downsized to get rid of the mortgage) and no investment assets.
Income: $33,982
Expenses
Rates, water and electricity: $3,600
Phone and internet: $1,200
Food: $7,280
1 car insurance & rego: $970
Fuel: $1,040
Health insurance: $2,400
Club memberships: $240
Alcohol: $1,560
Entertainment: $5,200
Holidays: $5,000
Total: $28,490
Surplus: $5,492 (maybe for gifts for the family)
So there you have it, even on the Age Pension, a couple should be able to live a LUXURIOUS life with $5,000 of holidays and $100 per week just on entertainment!
Of course, it would be incredibly easy to live a fun and fulfilling life on much less which I will discuss in other posts, for example, getting rid of the car!
Of course, ideally you will have some investment assets and if you can produce your required income in your 30's, 40's or 50's then you can retire early!
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I look forward to hearing from you!
Peace.
E.
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