This is a topic that comes up a lot. Because the primary source of income for nearly 70% of retirees is a full or part Age Pension, the ‘liveability’ of the pension is of critical importance.
But one Age Pensioner may bear little resemblance to another.
With nearly 2.6 million Australians aged 65 and over receiving a pension, there is a wide spread of economic circumstances.
Despite this, retirees across the board are often told about the importance of having ‘rainy day’ money. The ideal amount, according to some financial experts, is the equivalent of at least three months’ income. Let’s say you are a couple and your earnings are split between a part Age Pension and a retirement income stream, totalling about $60,000 per annum. This represents a fairly ‘typical’ retiree couples’ income. But at $5000 per month, this means that you will need $15,000 to satisfy the above ‘rainy day’ target.
If we apply this same principle to a single retiree on a full Age Pension, they would need to have $7128 in rainy day funds, based upon entitlements of $1097 per fortnight or $28,514 per year.
This sounds a lot to stash away when you’re on just $28,514 per annum, doesn’t it? Which set us to thinking about whether people on a full Age Pension can save at all.
This article doesn’t promise solutions; it’s offered as a thought starter and a chance to raise ideas. Retirement is as individual as you are and so the assumption that someone can save as much as someone else is unrealistic. One person may be facing multi medical challenges or helping out other family members. Another may be living rent-free and much more able to save.
