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.
This guide offers some great money-saving tips to help you cut down on your expenses and ensure your retirement savings go further. Plus, you can compare some great bank accounts designed specifically for retired Australians, and some high interest savings accounts to put your money to work for you.
High interest savings account offer
Rabobank Online Savings High Interest Savings Account
standard variable rate
High interest savings account offer
Maximum variable rate of 2.75% p.a. for 4 months, reverting to a rate of 1.30% p.a. No deposit or withdrawal conditions. Available on balances below $250,000
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.
How much money do I need in retirement?
The first thing you should do is figure out how much money you need in retirement to fund the lifestyle you want. This is a seemingly impossible task!
So how much super is enough? Well, the answer 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 Standard
$24,270 per year($467 per week)
$43,695 per year($840 per week)
$34,911 per year($671 per week)
$60,063 per year($1,155 per week)
$23,878 per year($459 per week)
$39,443 per year($759 per week)
$35,369 per year($680 per week)
$55,382 per year($1,065 per week)
*NB: This Standard is updated regularly in line with the cost of living. The figures above are taken from the Standard for the 2017 June quarter.
These figures show that if you want to enjoy a relaxed and comfortable lifestyle for a couple, you’ll need to allow for around $60,000 each year. 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 on your spending when you're retired.
Our top money saving tips
Maximising your savings during retirement doesn't have to be difficult. The following tips can help you reduce your expenses and enjoy a comfortable retirement.
Set weekly savings goals. Setting goals helps to encourage good budgeting habits, and make you more conscious of how much you can afford to spend each week.
Cut back on unnecessary expenses. There are some expenses you can easily reduce from your weekly budget in order to meet your retirement savings goal. Read the section below for some ideas on what expenses you can eliminate.
Search for the best deals. The internet is a great way to determine whether you're overpaying for things like your home loan, phone plan, groceries and more. Read the savings section below for more information on how you can save on these items.
Take advantage of free items. Everything from Wi-Fi to social activities can be access for free if you do your research. Find out how.
Expenses you can cut back on or eliminate when you're retired
Want to tighten your belt? There are plenty of expenses you can reduce or eliminate from your weekly budget altogether.
Landline telephone. If you already have a mobile phone, 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. But if not, you might consider shopping around for a better deal on your home loan.
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. Plus, the government has introduced more incentive to downsize, changing the superannuation legislation to enable you to add the proceeds of selling your home to your superannuation.
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 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. 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.
Be frugal and take advantage of freebies
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.
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.
Andrew Munro is the global cryptocurrency editor at Finder. After previously writing about insurance and other areas, he now covers the latest developments in digital assets and blockchain and works on Finder's comprehensive range of guides to help people understand cryptocurrency.
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