Before you’ve reached that stage of your life, it’s difficult to get a sense of the financial obligations of retirement. The Association of Superannuation Funds of Australia (ASFA) Retirement Standard December quarter figures, put the yearly spend of retirees over the age of 65 (and living what’s considered a comfortable retirement) at $59,236 for couples, and $43,184 for singles, but this doesn’t take irregular expenses into account.
If not properly managed, irregular expenses can land someone on a fixed income in serious financial strife. Here’s a list of four key expenses to be mindful of in retirement, and what you can do to ensure they don’t disrupt your budget.
1. Holidays and leisure expenses
There’s absolutely nothing wrong with enjoying yourself in retirement, but international holidays, weekend escapes, even something simple as keeping up your weekly golf habit can all add up. Make sure your retirement budget has a way to pay for these leisure expenses, and you can be sure your nest egg will be around for the long haul.
2. Home improvement expenses
Even if you’re not particularly interested in renovating your property, the cost home improvements (that may be necessary after years of wear and tear) need to be considered. Ensuring a portion of your nest egg is set aside for any important home improvement expenses is the best way to avoid a serious financial headache down the road.
3. Bailing out an adult child
Financially, helping adult children is one of the biggest budget squeezes for seniors who have entered retirement. And while you shouldn’t feel as though you can’t lend a family member a hand (especially if you’re in a fiscal position to do so), it’s important to consider your own budgetary needs and how they’ll be affected by this.
4. Caring for a partner
It’s a scary prospect to think about, but you never know what’s around the corner and a time may come where your partner’s health will bring with it serious financial concerns. It’s important to be aware of the constraints of this situation, and consider whether your retirement budget is prepared to cope with this fiscal demands.
Do you feel as though you’re ready for these retirement expenses?
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