One of the most common questions that pre-retirees google is "How Long Does $500,000 Last In Retirement?"
Well, as our projections estimate:
Your money will run out at age 82 by spending $90,000 per annum on total living expenses.
Your money will run out at age 88 by spending $80,000 per annum on total living expenses.
Your money is unlikely to run out before life expectancy by spending $70,000 per annum on total living expenses.
Whilst the above estimates are great base level projections, working with a Financial Planner can help all pre-retirees:
Tailor their retirement planning: For instance:
Do you want to provide your children with an inheritance (at passing or an early inheritance gift)?
Do you want funds in reserve to afford a higher standard of Aged Care in the future?
Do you plan on spending more in the earlier years of retirement whilst you are still most active, and then reduce back your expenditure?
Having a longer lasting or better quality retirement: This often achieved via:
superannuation contribution strategies
age pension strategies
tax minimisation strategies
investment advice
Unfortunately, many of the Retirement Calculators available online only are very basic. Most only calculate returns from superannuation without also showing the income generated from Age Pension (if eligible).
Fortunately, as Financial Planners, we have sophisticated financial modelling to provide detail projections for each and every individual. This allows us to:
Answer common questions such as "when can we afford to retire?" or "how much can we afford to spend each year in retirement?"
Quantify the dollar benefits of each of our strategies: such contributing into superannuation versus leaving funds in a bank account.
If you're a pre-retiree looking for guidance you can visit our Retirement Planning hub and book in an obligation free chat:
In each scenario above, we have assumed the clients have:
Just reached age 67 (Age Pension eligibility age)
A home which is fully paid off
$250,000 in each of the couples superannuation income stream accounts
$10,000 in cash and $50,000 in combined personal assets (e.g. home contents and vehicles)
Assumed the clients are invested in a moderately conservative investment style generating 5.69% per annum
Comments