1. Bert born 1930 says:

    LoL Do you really think an 85 year old will be flying off to Bali every year ? Or renewing their $1500pa gym membersahip ? buying $200 reeboks ?? As you get older your expenses DECREASE. All these $1,000,000 retirements are promoted by greedy interests

  2. This and related articles appear to assume that an annual draw of 4% will continue for life. Of course, to remain compliant, a superannuation fund must distribute a minimum percentage of the account balance each year, which increases over time, from 4% at age 55 to 14% at age 95 and beyond. Surely a much higher starting balance is required to achieve a reasonable income after age 80, when the minimum draw increases to 7%.

    • @ David . Your right the draw downs increase from super as you age that doesn’t mean you have to spend it. The 4% SWR is based on your spending rate. The extra money withdrawn can be reinvested outside super the tax free thresholds are pretty generous at 65 the SAPTO allows 59k tax free for a couple outside of super.

  3. Dear Trish

    Graeme Walker’s comments seem spot on to me, in particular that lifelong needs are unpredictable and the further out we plan, the more uncertain those needs become. That’s why the ASIC calculator builds in an extra bit of ‘inflation’ on top of simple cost of living (CPI).

    Based on my experience in looking after my very elderly parents’ finances, the cost of living can really increase significantly in your 80s and 90s. Medication, more frequent doctor’s visits that cost more if required at home, and possible nursing home fees (including bonds) push up costs in your final years. While most people may not need to go into a nursing home, if you do, then a ‘comfortable’ lifestyle of a quiet residence, a pleasant room of your own, nicer food, onsite physiotherapy and podiatry may require you to pay for an ‘extra services’ facility with much higher fees.

    If you have money to spare, it may be worth discussing these issues with children or potential heirs and carers so they realise that your home may have to sold or your capital may have to be used up if you need to go into care.

    • Hi Michael
      Many thanks for your contribution to the discussion. The articles are merely conversation-starters and prompts for readers to do their own calculations regarding their lifestyle needs. For example, some readers believe I am too conservative with my assumed investment returns. Other readers want the tables recalculated without Age Pension entitlements.
      I also use different assumptions to ASIC, as a means to protect the copyright of our articles.
      In response to your comment about the further out you plan, the harder it is to plan, I definitely agree, and these projections and plans should never be set in stone.
      A further complication, especially for couples relying on a part Age Pension, is if one member of the couple dies, then the Age Pension entitlement is often dramatically reduced due being subject to the single person’s assets test.
      In relation to the assumptions that I use, I am trying to provide as much information as possible without loading it with complexity, and I disclose the assumptions so readers can adjust the assumptions for different scenarios.
      In a future version of this article, I will include ASIC’s 4.5% indexation, alongside my 3% indexation.

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