When planning retirement, anticipating expenditure can be difficult.
Particularly, essential vs discretionary spend, or put more simply, needs vs. wants.
A recent Milliman report reviewed the spending patterns, behaviour and trends of Australian retirees over the past 20 years.
In terms of how the spend on essential items changes over time, the graph above shows how retirees in the 70th percentile of wealth spend their money throughout their retirement.
Spending on essentials like food, household goods, clothing and communications remain steady over time. As to be expected, travel, transport and leisure spending declines with increase in age. It is important to understand as a retiree or soon to be retiree where your money will go. Depending on your interests and priorities, what will your needs vs wants split be? Understanding the common spending categories will
help you plan your retirement spending and ensure your financial assets will see you through your retirement.
This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, HH Wealth does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, HH Wealth does not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.
This blog has been written and published by Insight Investment Services.
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