Explaining the retirement tribes

For too long, retirees have been viewed as one big homogenous group. Of course, they’re not.

At the start of 2017, YourLifeChoices and The Australia Institute created six retirement tribes on the basis of the following criteria:

  • main source of income either from private investments or government pension
  • home-owner or renter
  • couple or single household.

The result was six tribes: Affluent Couples and Singles, Constrained Couples and Singles and Cash-Strapped Couples and Singles. Where do you belong?

Affluent Couples and Singles – homeowners with private income

Estimated annual expenditure $76,608 and $43,724

  • Retirees in these tribes tend to spend more on energy than their counterparts – although a much lower proportion of income – suggesting that heating and air-conditioning are less of a problem than in more frugal, pension households.
  • Weekly expenditure on food, which includes dining out, is high ($243 and $122) and significantly more than the Cash-Strapped tribes (couples and singles on an Age Pension who rent). Similarly, $31 and $20 spent per week on clothing and footwear is more than three times the Cash-Strapped average.
  • Recreation costs, including entertainment and holidays, are 20 and 17 per cent of expenditure, compared with nine and seven per cent for Cash-Strapped retirees.

Constrained Couples and Singles – homeowners on an Age Pension

Estimated annual expenditure $44,082 and $24,360

The maximum base Age Pension for couples is $16,866 each per annum and for singles $22,360. Many in this category may also be on part pensions so private income must make up the shortfall.

  • Housing expenditure was relatively low for couples in this category, 13 per cent, but high for singles, 19 per cent.
  • The percentage spent on food was the second highest outlay for couples (20 per cent) and the third highest (17 per cent) for singles.
  • Clothing and footwear expenditure was about half that of both privately funded couples and singles.
  • The percentage spent on transport was high (15 per cent and 11 per cent)) compared with other categories.

Cash-Strapped Couples and Singles – renters on the Age Pension

Estimated annual expenditure $37,094 and $23,286

  • The highest percentage of income, as expected, was in housing – 29 per cent for couples and 36 per cent for singles.
  • The lowest spend was on health – a mere five per cent each – which raises the question whether they are missing out on important preventative measures due to financial hardship.
  • Alcohol and tobacco was a high spend category (six per cent and five per cent) compared with all other groups.