How to enjoy your retirement on a reduced income

You don’t need to be rolling in cash to be able to enjoy your retirement.

After decades of working full-time, it can be difficult to adapt when you reach retirement and you no longer have the same disposable income. Having enough money set aside for a comfortable retirement is a very real concern for many Australians, but the good news is that you don’t necessarily need to be a millionaire to enjoy yourself when you retire.

Check out these great tips to help you cut down on your expenses and help your retirement savings go further.

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Rates last updated November 25th, 2017
Name Product Debit Card Access ATM Withdrawal Fee Fee Free Deposit p.m. Monthly Account Fee Product Description
Bank of Sydney Retirement Account
Everyday bank account that offers retirees over 55 years an easy way of banking.
Community First Retirement Plus Account
Everyday account that rewards those over age 55, pensioners or retirees with a competitive interest rate.
Greater Bank Retirement Plus
Great if you're over 55 years of age and want to earn a higher rate on your savings.

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How much money do I need in retirement?

Have you ever wondered how long your superannuation and savings would last once you retire and are no longer earning an income? HSBC’s Future of Retirement report, released in January 2015, found that while Australians expect to spend 23 years in retirement, their retirement savings will run out in around 10 years, forcing them onto the age pension.

So how much super is enough? The answer obviously depends on the lifestyle you want to live when you retire, but the Association of Superannuation Funds of Australia (ASFA) Retirement Standard provides a benchmark figure of the average budget Australians need to live either a modest or comfortable lifestyle after they stop work.

ASFA Retirement StandardAnnual living costsWeekly living costs
Couple – modest$34,216$658
Couple – comfortable$59,160$1,138
Single – modest$23,767$457
Single – comfortable$43,062$828

*Taken from AFSA Retirement Standard, June quarter 2016

These figures show that if you want to enjoy a relaxed and comfortable lifestyle for a couple, you’ll need a super lump sum of $640,000, or $545,000 for a single person. Hopefully you’ve got more than enough funds stashed away to live your retirement exactly how you want, but if not, there are several simple ways you can cut back.

Expenses you can cut back on or eliminate

Want to tighten your belt? There are plenty of expenses you can reduce or eliminate from your weekly budget altogether.

  • Landline telephone. You already have a mobile, so do you really need to pay extra for your landline telephone service? Half the calls you get on the home phone might well be telemarketers anyway, so consider cutting off the landline and using your mobile only.
  • Expensive phone plans. While we’re on the subject of your mobile, when was the last time you reviewed your phone plan? Consider how much you’re paying for calls and data and how much of your package you actually use – it could be time to downgrade or shop around for a better deal.
  • Pay TV. Although Foxtel has dropped its prices in the past couple of years, it’s still more expensive than streaming subscription TV services such as Netflix and Stan. Consider whether you might be able to downgrade or even scrap your pay TV package and save some extra dollars each month.
  • Transport. While two cars may have been essential when you and your spouse were both working, ask yourself whether you can get by with just one vehicle now that you’ve retired. You can make a profit selling your car and also enjoy big savings on rego, insurance, fuel and running costs. Seniors can also take advantage of discounted public transport costs.
  • Newspaper and magazine subscriptions. Much of the content you read in magazines and newspapers can be accessed for free online, so is it worth paying ongoing subscription fees?
  • Gym memberships. If you’re a regular gym-goer and get value for money from your membership, that’s great. But if your membership is something that always seems like a good idea at the time but never used, maybe it’s time to cancel.
  • Mortgage. Hopefully you will have paid off your mortgage well before you reach your retirement, which should free up plenty of extra funds for you to spend on everyday living.
  • Travel expenses. When you’re working full-time, you often have to squeeze your holidays in during peak travel periods when flights and accommodation are much more expensive. But when you’re retired you can holiday whenever you want – even embarking on a mid-week getaway can be substantially cheaper than taking the same trip on a weekend.
  • Eating out. Earlybird and seniors’ specials can be great money savers when you’re no longer working. You could go out for lunch instead of dinner and enjoy cheaper menu options, or take advantage of coupons and discounts to chain eateries.
  • Downsize. While a four-bedroom home might have been a necessity when your three kids lived at home, now might be a good time to consider downsizing to a smaller property. This will save you time on maintenance but also save money in terms of energy and upkeep.
  • Energy. Energy bills can be a substantial ongoing expense during your retirement, so shop around to see if you can find a cheaper provider. You might be surprised to find out just how much you can save by switching.

Save money when shopping

If you’re looking for smart ways to pinch pennies, it’s time to become a savvy shopper. These tips will help:

  • Shop online. If you’re an inexperienced online shopper, now is the perfect time to start hitting up some digital stores. You can save a whole lot of money when you shop online, whether it’s for clothes, beauty products, electronics or holidays, and it’s quick and easy to compare prices across multiple stores.
  • Use promo codes. You can save even more off the listed price by taking advantage of online coupon codes. These entitle you to discounts and other perks like free shipping, so check out finder.com.au’s latest collection of promo codes.
  • Use cashback sites. Online cashback sites like Cashrewards and Qwibble allow you to earn a percentage of the purchase price back when you shop online at a range of retailers. Check them out to help boost your bottom line.
  • Stock up at sales. Plan ahead and purchase essential items when they’re on sale. Non-perishable items like toilet paper and washing detergent can be bought and stored for long periods, so buy in bulk whenever anything you need is marked down.
  • Join a loyalty program. Get rewarded for doing your shopping by joining a loyalty program. You need to buy groceries anyway, so why not earn rewards points for doing so? In Australia, Coles runs flybuys and Woolworths runs Everyday Rewards, allowing you to earn reward points everytime you shop.
  • Use senior discounts. Don’t be embarrassed about your age; becoming a senior comes with a few perks, so why not take advantage of them? Many retailers offer discounts to seniors and pensioners, so show your Seniors Card and pay less for everything from clothes and meals to public transport.
  • Go outlet shopping. Whether you need new clothes, kitchenware or anything else, hit up your nearest factory outlet centre to see if you can find some attractive discounts. However, remember to ignore the temptation to buy things you don’t really need just because they’re cheap.
  • Research your purchases. If you’re purchasing a big-ticket item such as a new TV or fridge, research and compare reviews of products before you buy. This will ensure that you find a product that represents good value for money and should last a long time. Also remember to check the energy-efficiency of appliances before you buy, not just their purchase price – this will help you work out how much they will cost in the long run.
  • Pay off your credit card. Few expenses eat into your retirement savings as quickly as high-interest credit card debt can. Whenever you spend money on your credit card, pay it off before the interest-free days come to an end and your debt starts growing.

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Get free stuff

The best things in life are free, so make sure you never pay for something you can get without handing over a cent.

  • Join a library. Don’t buy books when your local library has thousands of novels just sitting there waiting to be read. It’s free and easy to do and if you end up with a book you don’t like, just take it back and exchange it for three more.
  • Free Wi-Fi. Only use the Internet occasionally? Coffee shops, restaurants and some other retailers offer free Wi-Fi, so consider paying them a visit when you need to jump online.
  • Visit a museum. Take advantage of free days and events at museums and art galleries. Get some culture, expand your knowledge and do it all for free.
  • Join a club. From men’s sheds to crochet clubs and dog walking groups, there are plenty of social groups you can join to help you make the most of your retirement. They’re fun, they’ll help you make more friends, and many of them are free.
  • Get help from the government. Contact the Department of Social Services to learn about any benefits you may be eligible to access, such as pensions, allowances and concession cards.

Keep saving

Finally, just because your retirement is here doesn’t mean it’s time to stop saving money. Simply by opening a high-interest savings account, you can ensure that your money works harder for you than if you merely hide it under a mattress. This will increase your spending power throughout your retirement and doesn’t require you to take on any extra risk. You should also review your account regularly to make sure there are no hidden fees and that you are still getting a competitive interest rate.

With a little common sense and hard work, it’s easy to make your money go a very long way in retirement, leaving you free to simply sit back and enjoy yourself.

Andrew Munro

Andrew writes for finder.com.au, comparing products, writing guides, sniffing out deals and looking for new ways to help people get the most out of their money.

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