How much do you think you need for financial freedom?

How much you think you’d need to be financially free in retirement?

How much you think you’d need to be financially free in retirement?

Findings of a survey released earlier this year revealed that Australians think they need an average of $830,000 in savings to feel financially free.

Each year, the National Australia Bank conducts its Financial Freedom Survey. This year, the ‘magic’ number for both men and women jumped by $45,000 and $92,000 respectively.

People living in New South Wales say they need $1 million, South Australians say they need $809,000, while those in Tasmania need $337,000.

Victoria was the only state where the freedom figure actually dropped from the previous year – from $864,000 last year to $788,000 this year. 

What would Aussies do with that magic amount? Most would pay off debts (36 per cent), use it for travel (28 per cent), invest (20 per cent), keep in case of emergency (19 per cent), and help out their families (32 per cent).

Interestingly, just one per cent of those surveyed would spend the money on luxury personal items. Four per cent said they would work less or retire early.

“Many Australians dream of a major financial windfall to change their lives – but it turns out we don’t need a mega-million-dollar jackpot to feel financially free,” said NAB Group Chief Economist Alan Oster.

“For some, being ‘financially free’ means being able to pay off all their debts; for others, it could be no longer having to earn a salary, or it might just be not being stressed about money.

“Unsurprisingly, where you live, how much you earn, your gender, and your relationship status impact how much you think you will need.”

The report showed that people living in capital cities need around $950,000, in contrast to $615,000 for regional residents.

How much ydo ou think you need for financial freedom in retirement? This amount is not meant to be a ‘want’ or ‘win-the-lotto’ type of number, but rather, an amount that would enable you to live without money worries. Why not share your answer n the comments below?

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    COMMENTS

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    24th Jul 2018
    10:30am
    Ironically - though logically if you think about the idiotic pension rules sensibly - you are probably much better off in retirement with $300K to $500K and a part pension (for a couple) than with $850K - unless you are lucky enough to be able to achieve quite high investment returns without risk. That's a rather stupid situation for any government to create, but whoever claimed politicians had brains!

    To a couple to be financially free in retirement, they probably need to retire with about $1.5 million - or maybe $2 million. (Who really knows, since we can't predict what will happen in 30 or so years they might left to live?) But if they are content to deal with Centrelink, $300,000 would be adequate and might yield them a higher total income than $1 million in savings when the costs of managing investments and the loss of benefits is taken into account. It might be a question, for some, of whether dealing with Centrelink is more stressful than coping with the stress of managing investments and dealing with risk - rather than a simple question of ''how much money do you need''.

    Then again, we don't know what governments will do to pensioners in the next 30 years either. ScoMo is already threatening to abolish the OAP, and we know the LNP is desperate to reduce it any way they can and to reduce the number of folk eligible to receive it.

    Ultimately, the only real certainty of financial freedom might be the ability to live without money!
    patti
    24th Jul 2018
    10:46am
    Don't need much to live relatively comfortably. Depends on what your expectations are I guess
    Cowboy Jim
    24th Jul 2018
    11:12am
    Agree with OGR, about $280'000 invested and a part pension would do it for us and that is probably where we are, have not done the figures for a while.
    Rates, body corp and private health insurance account for $10'000 per year. We are saving quite a bit of money as we seldom use the car and we are close to public transport $2.50 a day.
    Doing a bit of travelling before we reach 75, at least once a year to Europe to see Mum, she's a few years short of 100 and she is still pretty good.
    So all in all, we need about $45K a year. Without the travel it would go down to $35K. For people with a necessary car you would have to add another $100 a week.
    Old Geezer
    24th Jul 2018
    11:46am
    $400,000 invested well is more than enough for me without any welfare.
    Anonymous
    24th Jul 2018
    2:26pm
    Yes OGR I agree. ANyone who already has that and still works when they dont need to , shouldnt then complain about not getting the OAP, which is welfare meant for the less fortunate
    Old Geezer
    24th Jul 2018
    2:37pm
    I agree olbaid. Most people on welfare expect a lot more money for nothing no matter how much they get.
    Cowboy Jim
    24th Jul 2018
    2:42pm
    OG - I'd rather be on a part pension and in private health and in a way the Govt is paying our full health insurance. And another bonus is that we no longer have to file tax forms as we are not investing well obviously.
    Old Geezer
    24th Jul 2018
    3:11pm
    It is quicker and far easier to lodge a tax return than the deal with Centrelink. I don't pay anything now to visit doctors or specialists so it is no advantage me being on a pension.
    Cowboy Jim
    24th Jul 2018
    3:40pm
    Good for you OG, if you get all those concessions you might be right BUT I do not, still have to show my concession card at the chemist and the council would immediately charge me $500 per year more for the rates also my power bill would be higher. C/Link has never bothered me since I filled all forms out to their satisfaction and when I leave the country for more than 6 weeks I shall let them know and it never made any difference to my pension as I have spent most of my life right here in Oz. But we will do what is best for us and I have no problems being called a pensioner, certainly I am old enough. Never got anything from the Govt before, not even the first home buyer bonus 45 years ago - a $1500 amount.
    GeorgeM
    24th Jul 2018
    8:59pm
    Agree with your comments, OGR, and some good comments from CJ.
    They should simply work out and deliver the Universal Pension, and forget about all these analyses by self-interested business groups.
    patti
    24th Jul 2018
    10:45am
    Dream on, I say to myself. I had virtually no savings when I was forced into retirement by redundancy and a terminally ill partner. My only income for the past 10 years has been a government pension. The one saving grace for me is owning my own home, although the costs of maintaining it are draining away what little I have. With an income of less than $25,000 pa, I see my friends and family take off on cruises, overseas holidays etc. I am fortunate to live in a beautiful part of the world, near the beach, so most of my "entertainment" is free. One does not need millions to retire comfortably. I don't go without what I need, sure I'd like to travel more and have meals out, but I don't suffer because it doesn't happen.
    Kathleen
    24th Jul 2018
    11:39am
    You sound similar to us patti but I am not on my own. We own our home and live in a beautiful place away from the big city and near a beach and countryside. I agree that you don’t need millions and you can do without eating out. I think people spend up or down to their income. Happiness is not represented by a dollar sign. Values have a lot to do with it.
    jackie
    24th Jul 2018
    12:01pm
    patti...I agree you don't need money to enjoy life...that is why so many well of people are jealous of the poor and blame it on the other way around.....Financial freedom is a myth....The rich can't ever have enough money because they are slaves to the dollar.
    KSS
    24th Jul 2018
    12:37pm
    Sweeping statements much jackie! Can we take from your comment that all the 'poor' are deliriously happy and more than satisfied with what they have/don't have then? No need for pension or other welfare increases then?

    Well off people being 'jealous of the poor' is as much a myth as your assertion that "The rich can't ever have enough money because they are slaves to the dollar"
    Hasbeen
    24th Jul 2018
    6:53pm
    I agree with you ladies, but then I lead a great life.

    I sailed a fair bit of the world in the navy, & sailed the Pacific in a yacht. I was involved in the great barrier reef tourist industry on islands & on the water for years.

    I have no need for another restaurant meal, ever. Hate the idea of spending time at a resort or on some cruise ship, & am happy to stay away from Europe Asia or the middle east.

    I would not mind driving the US route 66, but there is much more to see in Oz before I would bother. Any touring I do will be in my own vehicle, & at my pace, commercial travel is of no interest at all.

    I live very comfortably on about $26000 a year, & have a ball. Perhaps if I had lived my life in the same job, in one city it would be different. My advice to young adults, Live your bucket list while you are young, then you can have a relaxed & happy old age. Leave it till too late, & getting old will be a problem, rather than a pleasure.
    Anonymous
    24th Jul 2018
    7:01pm
    Excellent advice Hasbeen and I agree wholeheartedly.
    Looks like you have had an adventureous and fulfilling life and still are

    24th Jul 2018
    12:08pm
    An amount that earns me equivalent to my annual spending means financial freedom
    Anything more is just a bonus
    My annual spend is less than the pension and my $500k gives me that and more for holidays and other splurges
    Anonymous
    25th Jul 2018
    4:50pm
    You are very fortunate, olbaid. My annual spend is very much higher than the aged pension, by necessity - because of challenging family circumstances and my partner's health issues. As I continue to say, it comes down to personal circumstances.

    It's extremely ignorant and arrogant to assume that because you are in a fortunate situation in regard to financial needs, everyone should be the same. I didn't ask for the challenges we face.
    Thankfully, I am currently able to meet them. That saves the taxpayer countless thousands and promises children who might otherwise struggle good educational opportunities, good food, decent clothing, comfortable housing, and even the chance to play sport and pursue hobbies. It enables a seriously disabled child to have therapies and treatments that are resulting in advances that would not be achievable without my financial help. And it enables struggling young parents to have a little respite when they need it.

    There's a song that was once very popular called ''Walk a Mile in My shoes''. Maybe you should look up the words. It contains some very wise advice. But then, I guess I'm lucky that I did walk in the shoes of the disadvantaged for a long time, and I spend a lot of time with very special people who have faced enormous challenges - so I have both empathy and charity.
    Anonymous
    26th Jul 2018
    2:19pm
    You are one bitter and sad person Rainey. I hope you find hapiness
    Charlie
    24th Jul 2018
    12:37pm
    Give it $1.5 million, not everything is going to run to plan.
    KB
    24th Jul 2018
    1:32pm
    It depends on the person and needs/ I would be happy with $30 000 a year to cover a roof over my a to pay utilities people to do my gardening and house work due to physical needs a holiday and enough for a holiday and entertainment plus charities. Money does not buy happiness. A life tress free of not worrying about what the government will do for pensioners who rely on disability and aged pension
    KB
    24th Jul 2018
    1:32pm
    It depends on the person and needs/ I would be happy with $30 000 a year to cover a roof over my a to pay utilities people to do my gardening and house work due to physical needs a holiday and enough for a holiday and entertainment plus charities. Money does not buy happiness. A life tress free of not worrying about what the government will do for pensioners who rely on disability and aged pension
    Old Man
    24th Jul 2018
    3:08pm
    Another re-hashed article that has really been done to death. Fair to say that all of the respondents are 100% correct in what they say as each of us have different lifestyles, different goals and we live in different parts of this great land. Some of us own our homes, some are still paying a mortgage and some are renters. Each of us have a different story to tell so there can never be a "one size fits all" answer.
    Anonymous
    24th Jul 2018
    3:21pm
    Yes Old Man - its great that Australia has the pension safety net for those who fall on unfortunate times.
    We have a world class superannuation system that should ensure a majority of the population will live very comfortable retirements
    Cowboy Jim
    24th Jul 2018
    4:00pm
    The "world class" superannuation is pretty good for people with a decent job. Had one of those 30 years ago and then things changed and I worked at anything I could. Should have been a public servant, super looks after them. As for Australia, it is not alone, every "white" nation has a pension system and quite a few are more generous and less onerous than in Australia.
    GeorgeM
    24th Jul 2018
    9:02pm
    Just to extend your comment, CJ, we in fact have the meanest Govt in the OECD when it comes to age pensions - although it is paid for since 1946 by the 7.5% tax included in the tax rates even today.
    The superannuation system was also badly designed by that idiot Keating and it has been milked for maximum benefits by the wealthy.
    Old Geezer
    25th Jul 2018
    10:57am
    The government is too generous as most people on welfare get more than enough for the basics of life and have enough left over to fill that booming cruise ship industry.
    Anonymous
    25th Jul 2018
    2:48pm
    You are right, George. Australia spends HALF what other developed nations spend on the aged, and the spend is likely to fall dramatically soon due to superannuation, while other nations are increasing their spend. Yet Australia tolerates record aged homelessness and 1/3 rd of our aged living in poverty. Of course selfish narcissists like OG don't care about that - any more than greedy politicians! It's a disgrace. Then there is the illogical nonsense assets test that makes those with $300K to $500K better off in income terms than many with $1 million+ and therefore DISCOURAGES saving for retirement. And some ignorant fools endorse these ridiculous harmful policies that are destroying what was once the best nation on earth.
    Anonymous
    25th Jul 2018
    5:14pm
    Superannuation is in effect your retirement benefit that government has designed for all Australians
    In future most Aussies will retire with a nice little super nest egg, but those who fall on hard times can still rely on the pension which is a safety net not an entiltlement
    Anonymous
    26th Jul 2018
    9:02am
    The future isn't here yet, olbaid. My generation paid TAX to fund their retirement. Actually, my partner contributed to super to, in the days when it was poorly regulated. Ended up with ZILCH!

    The aged pension is NOT a safety net today. Morally and ethically, it's an ENTITLEMENT, bought and paid for by today's retirees.

    Furthermore, superannuation will only EVER substantially benefit the well-paid who don't face crisis. It's a tax dodge, not a retirement funding system. It is costing this country much more than the OAP and 80% of the benefit goes solely to the affluent. It's uneconomical and seriously flawed from a national cost/investment viewpoint.

    And needs-based welfare is also uneconomical, driving manipulation to pretend need and excessive and unwise spending and gifting.

    If we had RESPONSIBLE government, focused on the interests of the nation, we'd have a universal pension and superannuation would be restructured to end the subsidies to the wealthy and assist battlers to save for their old age. But that will NEVER happen because of GREED AND SELFISHNESS (and the classic ''I'm okay Jack, stuff you!'' mentality of folk like you.)
    Anonymous
    26th Jul 2018
    2:18pm
    You are one bitter and sad person Rainey. I hope you find hapiness
    Anonymous
    26th Jul 2018
    3:20pm
    I am neither bitter nor sad, olbaid. I am very happy with my lot in life. I consider myself very fortunate - and very wealthy in all the ways that count (wonderful friends, loving family, a comfortable lifestyle, rewarding work and hobbies...)

    I speak out here because I am concerned for the state of the nation and for the people who are hurting because of bad political policies, bad government, and bad economic management. Unlike you, I can't take the ''I'm okay Jack, stuff you'' approach - no matter how fortunate and happy I am. I care about others.
    *Loloften*
    1st Aug 2018
    12:32am
    So true OM.....it's not & never will be "one size fits all" due to what life throws @ us all, often "crushing" our prior plans. However, it's so obvious that the rich are richer & poor poorer than were our parents when often replied solely on OAP. Was shocked when just rec'd usual 2mthly gas bill (from same company, including bigger %discount & credits this yr) so dragged out the exact same bill from 2017 & the usage was pretty much exactly the same....the 2018 bill one was 25% more expensive!?