23rd Mar 2018
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Are you spending too little in retirement?
Author: Ben Hocking
Has retirement made you a scrooge?

We are used to reporting on ways to spend less and save your money, but there are some retirees who need to know when to loosen those purse strings.

It seems counter-intuitive that after years and decades of saving for your retirement that you might have the opposite problem once you have stopped working.

However, there are some Australians who have become so good at saving for retirement that they forget about the goal they were saving for – living comfortably in their golden years.

If you have accumulated a large nest egg for your retirement, you’ll have a lot of money to manage, potentially more money than you have managed at any other stage of your life. While some people will be lured into overspending with this illusion of wealth, there are others who have been so rigid with their saving plan, they find it difficult to switch to spending mode.

While the problem is at the opposite end of the spectrum to those retirees who are spending too much, the solution can be the same – a budget.

Start by giving yourself an annual salary. You will need to estimate the length of time you will need your money to last and you are always better planning on a long time, rather than a short time. Once you have figured that out, you can allocate a yearly spending figure that will make sure your savings last comfortably and ensure you won’t run out of money.

This figure can then be broken down into a monthly allowance, which will help you think about transitioning from an accumulation strategy, used when saving for retirement, to a decumulation mindset, when spending through retirement.

Signs you are spending too little

You live like a recluse
Retirement is supposed to be fun. You should be visiting friends and grandchildren, traveling, eating out and all those activities you couldn’t do when you were working full time. If you are not doing the things you love because you are afraid of spending the money, you might be saving too much. You are also healthier and more mobile when you are early in your retirement and you want to make sure you make hay while the sun shines, because that may not always be the case.

You are suffering instead of spending
If you or your spouse have a bad back, buy a better mattress. How about seeing a personal trainer to keep you mobile and healthy longer? Or ticking some items off your bucket list? Just because an item seems expensive, it doesn’t mean it will send you straight to the poor house. If an object or experience can improve your quality of life, you should consider it an investment, even if it is not a necessity.

Do you have a budget? Are you still locked in a saving mindset?

Do you know if you qualify for an Age Pension? Find out with our RetirePlanner tool.

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    COMMENTS

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    BERRYUPSET
    27th Mar 2018
    11:49am
    I think a lot of US worry we will run out of money(apart from the pension)
    Personally I go from saying oh f--K it YOU CAN`T TAKE IT WITH YOU!TO
    OH LOOK YOUR MONEY IS GOING DOWN TO QUICKLY..BETTER PULL YA HEAD IN!
    DEPENDS on who`s passed away thatweek!
    BERRYUPSET
    27th Mar 2018
    11:49am
    I think a lot of US worry we will run out of money(apart from the pension)
    Personally I go from saying oh f--K it YOU CAN`T TAKE IT WITH YOU!TO
    OH LOOK YOUR MONEY IS GOING DOWN TO QUICKLY..BETTER PULL YA HEAD IN!
    DEPENDS on who`s passed away thatweek!
    OlderandWiser
    27th Mar 2018
    11:58am
    Not much point in being a scrooge really. The government is just determined to take it all off anyone who still has some in retirement, and having anything makes you the target of all sorts of abuse and denigration from those who didn't save.
    BERRYUPSET
    27th Mar 2018
    12:04pm
    HI O G ..RAINEY!
    I never tell ANYONE how much!
    As you say it makes you a target!
    PLEAD POVERTY!
    GiGi
    28th Mar 2018
    10:57am
    Exaggeration sometimes helps, but not in this case. It is ridiculous, OGR, to suggest that the government wants to take all of your savings!
    tisme
    27th Mar 2018
    12:27pm
    whats retirement? whats superannuation ??? for those of us not considered to be workers we don't have either of these to look forward to
    Vander
    27th Mar 2018
    12:44pm
    I wonder how pensioners afford to pay plumbers $100+ for a 5 minute job to fix a leaky tap? Whilst I was working it took me almost a day's work to earn that amount.
    G








    +
    Rosret
    27th Mar 2018
    2:08pm
    Soap up the nozzle and block the drip hehe.
    I must say you tube has been fantastic with instructions on how to repair stuff. My kids say phone a plumber and my response is still, "Don't be ridiculous!"
    Old Geezer
    27th Mar 2018
    2:12pm
    Aint nothing I can't fix using YouTube.
    Janus
    27th Mar 2018
    12:45pm
    General agreement with the philosophy of this article.

    Having gone without for most of our life so that we could have a decent retirement, then getting kicked in the guts by the Libs (and Greens) and now Labor, we have decided to spend what we have (up to a point) so that we qualify for the part pension.

    We will spend most of it overseas on travel and holidays, rather than here on "stuff". Idiots in govts did't think of that, did they. As for leaving it to the kids, well, best of luck. They can fight over the house and the wheelbarrow if they want, but there won't be a lot of cash left over....
    AutumnOz
    27th Mar 2018
    4:30pm
    Janus, you don't have to spend it on "stuff". You can travel first class within Australia and see all the places you have not seen.
    The Indian Pacific train is a great way to spend money and there are connecting boat trips to the Kimberley from the end of the line.
    Overseas is too crowded and too far from home if you get sick.
    Sen.Cit.90
    27th Mar 2018
    12:50pm
    Tricky one this; When I moved into a Retirement Village, from a house; realising that the 30% exit fee would take a big chunk out of my selling price. I put leftover cash in the bank for the purpose of; when I'm unable to care for myself I would have a decent amount to buy into a care facility. The DSS got onto this charging me $680.00 for overpayment (I was unaware that I was being overpaid) and they reduced my age pension. I like many worked hard for my money, never wasted it spent wisely and saved. The government had already stolen my money by using the 7.5% they had been stopping from my wages supposedly for our Age Pension. Transferring us all to the present system where our pension contributions plus income tax are forgotten.
    World Prophet
    30th Mar 2018
    9:50am
    Mmmm... before anyone changes their financial circumstances, they should check what the implications would be. A good friend of mine sold his house that was solely in his name, but morally belonged to both his (separated) wife and him. He bought another house in his (separated) wife's name, for her to occupy, and became a grey nomad. He lost over half his pension because he had 'gifted' more than the allowed amount! Think before you do, folks.
    Old Geezer
    27th Mar 2018
    12:51pm
    If seems the more money I spend the more I make. I just wished I had retires years before I did as retirement is so much more lucrative than working.
    Rosret
    27th Mar 2018
    2:03pm
    How do you manage that OG? In investments?
    Old Geezer
    27th Mar 2018
    2:11pm
    Every time I have a major expenditure I seem to just make extra money to pay for it. Ask and you will receive I guess.
    KB
    27th Mar 2018
    1:35pm
    You need to budget for a rainy day like health care which can costs a fortune,Repair jobs can cost a great deal of money. You can learn to do minor repair jobs yourself or find someone you know who knows how to fix B small repair jobs,. If you rent then the landlord is responsible for repair jobs. Ben is right .Pensioners do need to enjoy themselves . otherwise life will pass by, There are things that people can do that do not cost the earth.
    Cowboy Jim
    27th Mar 2018
    3:55pm
    Yes KB, health insurance is a must have. Hurts like hell but every year we pay that $4800 or so for next year's premium, body corp and council rates yearly as well and the rest goes on things we like as well as food and grog. The smokes and the gambling we leave alone but that was not always the case. Something had to give.
    OlderandWiser
    27th Mar 2018
    9:29pm
    But KB, you CAN'T budget for a rainy day because the stupid government takes your savings. Hand out to those who have nothing - well, not much, and not enough, but a handout that costs the nation - and persecute those who save so that they give up and put their hands out as well. STUPID.
    Kathleen
    24th Jul 2018
    8:29pm
    That’s the OGR I remember, denigrate the pensioners and try to turn the tables so you are the victim and the poor are oppressing you.
    Sometimes you come across as half decent with compassion but you or your alter ego go on the attack against the pensioners who have every right to their pension after a lifetime of paying taxes.
    Good luck to you if you have more but don’t attack people who draw a pension because they have every right to it.
    Rosret
    27th Mar 2018
    1:56pm
    Unlike retirees of the last generation there is a finite bucket of money in our retirement fund.

    What we don't have is a fixed date of death. The government on the other hand insists we draw down 5% p.a. out of our super fund increasing as we age. The expectation is that we will all need the pension at 85. Since that is 10 years short of life expectancy - we must save!
    The most difficult thing about saving is inflation and government tax theft.

    So do all the house repairs as early as possible and get a new car on retirement - because nothing will get cheaper.
    Old Geezer
    27th Mar 2018
    2:14pm
    Just because you draw it down you don't have to spend it. I draw mine down and invest it as I don't need it.
    Anonymous
    27th Mar 2018
    6:41pm
    you will more incentive to save the excess drawdown and reinvest in shares as you will get the franking credits back if the income is outside super

    Silly Shortsighted Shorten
    Tib
    27th Mar 2018
    2:17pm
    I found out a long time ago that spending more money didn't make me happier. I buy what I want I just don't want much.
    Cowboy Jim
    27th Mar 2018
    3:58pm
    Happiness is having everything you want and you might be right there since you do not want much. Good luck to you.
    Old Geezer
    27th Mar 2018
    5:38pm
    Junk just clutters the place up and ends up in the bin anyway. So why buy it in the first place?
    Tib
    27th Mar 2018
    5:58pm
    I agree with both you guys. The problem is people don't know the difference between the quick thrill of buying something new and happiness. Women are the worst at this they always think the next thing they buy will make them happy.
    Anonymous
    27th Mar 2018
    6:43pm
    Use your money for experiences , not things

    like a good meal, travel or a good shag
    Tib
    27th Mar 2018
    8:29pm
    :)
    Cheezil61
    27th Mar 2018
    4:51pm
    Pffttt! If only we all had this problem!
    KEVINJ
    27th Mar 2018
    4:53pm
    While ur ALL lookg 2Save wi UTUb Help &,askg Neighbs Who Really Can, put a washer in Taps - U had {ALL} betr GET REAL busy, using Www, to research EVIL ""SERCO"".. An AUST 1,997 BooK -Jeremy LEE "WHAT will WE tell OUR Children ? Dis-possessing, The World's RichEST NATION", - AUST, ", - it, fore-told, WHAT EVL TURNBULL has Given Away, to ""SERCO"". &, Lots, Lots, LOTS MORE.. - NO- One Took Notice, BEC, HOWARD, ABBOTT &,- COSTELLO & REITH &, CORRUPT LABOR, Were CONNING, EVERY AUSSIE, with, GLIB, Smart ALEC MEAN-ING LESS TALK.. N OW, - 20 YRS LATER LATER, aft ALL the Damage has et in Like Cement, -1 RE-vamPed ANDREW BARTLETT, has GIVEN an AL-MIGHTY SENATE SPEECH - whc, COULD be thought of AS,-a RE-WRITE OF, the BOOK,- abv, I refer U all To, & Also, it - his DEC 5, 2,017 5 pm senate speech, iS like, bring a LUCKY ReadER, up to Date, - on, WHAT type of AUST, we will soon live IN, - with EVIL ""turn bull"' HANDING over,"CentreLinK"" CALL CENTRE, - TO, """ S E R C O """..Do NOT Continue, being an UN-healthy "COUCH POTATO"". IT will COST U, DEARLY.. UNDER "TURN COAT", WE ARE TRULY FINISHED.. BUT, He WIL,L be REPLACED. &, BECOME, A, DESPISED "N O- ONE".. LIKE, the "MODERN" version OF, OLD, Black & White Movies Of "ABBOTT & COSTELO"", but IN, the "LIKE-NESS"" To, the RUDD, GILLARD, RUDD, { 2 } Destructive TO, AUSTRALIA,- SICK, -- CREEPS.
    Poppysmum
    27th Mar 2018
    6:32pm
    ???
    Anonymous
    27th Mar 2018
    6:42pm
    does anyone ever read kevin's crap.

    my eyes hurt when I look at the blob of words and just scroll past
    MD
    27th Mar 2018
    7:53pm
    Get the impression KEVINJ is implying that either history repeats itself or cycles ad nauseam and recommends a book authored by Jeremy Lee titled 'WHAT WILL WE TELL OUR CHILDREN'. Oh, and not to forget (he tips) Serco will be appointed for administration of Centerlinks' call centre. Otherwise "We are truly finished".
    Maybe Kevin sees things from another perspective, a parallel universe perhaps ? That may be the way to go, and that's it for me as well.
    KEVINJ
    28th Mar 2018
    10:47am
    re- RAPHAEL -DOES Anyone read, KevinJ PosTs ?? Gd Questn. & Frm, MD -i get impression KEVINJ is implying -either HIST repeats itself or cycles ad nauseam. HE recommends BOOK - by Jeremy Lee:-"AUSTRalia 2000 WHAT WILL WE TELL OUR CHILDREN'. - & UPDATE frm KEVIN J, FOR READERS- IT i s ON-LINE, 250 PGs. & ( I Do STATE ) "SERCO" IS IN MELB & "appointed" for, ADMIN OF a LOUSY "CENTRE LINK S' CALL CENTRE. I DO see "important Things", ( M D ) - THANK U, - from Another Perspective.. THANK U AGAIN.. WARNING ABT the BOOK :-- MAYbe NONE on here will Have a STOMACH for, ITS contents.. a Fore-runner OF, ""Rotten SER C O"" & OTHER horrible ""WORLD TAKE OVER"" matters, which do NOT NEcessarily Involve I N-competent POLITICIANS, - bec of ALL the Evilly planned, 'Grand ScaleS. - RAPHAEL Is welc to Apologise, HERE, for the Lousy "REMARK S", made, about,-M E. -- Thanks, in Advance.. At least Say, I F, u had a STOMACH ??? for, the BOOK, O N--Line. - I have Posted ABOVE, AT HUGE, > PERSONAL, > TIME WASTE, - TO CLARIFY ---.
    MD
    28th Mar 2018
    8:09pm
    "TIME WASTE" KEVINJ ? Quite the contrary, a little humility comes hard to some hombres - we just need to hone our patience.
    GrayComputing
    13th Jun 2018
    12:05pm
    It is time for all of us to rant at our MPs and Senators daily to take action for human decency and a huge stress reduction for pensioners

    NO ASSET TEST FOR A PENSION EVER AGAIN!
    A pension is not welfare.

    Most economist say we will save taxpayers money by dropping asset testing because of the massive overheads cost in running Centrelink and the 10,000 conflicting rules.

    Hiring more Centrelink staff will only increase taxpayer’s costs for processing the creeping insane red tape monster system politicians and well paid bureaucrats have created.

    Help scrap it now. Become a hero.

    Even poorer New Zealand has a NO ASSET pension so it is cheaper and user friendly.

    Why worry that few million$ earners get it too. That is peanuts to them, not enough for a good vintage champagne.

    Do retired and retiring people really look forward and want 100++ visits to/from Centrelink and be part of 3 million waiting queues and lost calls?

    Does your MP really like being part of the system that allows this indirect abuse of the elderly?

    This abuse is actually sponsored by our government and forced down to Centrelink and borders on a criminal act.

    Why do MPs normally compassionate persons let this Centrelink abuse happen at taxpayers’ expense?

    Some opposition and independent MPs stand to lose their chance at being part of the needed government changes

    We all need to tell our MP and senators every day that these criminal asset tests for a pension must be dropped now.

    Also contact opposition and independent MPs who can help us to get a fair deal on pensions

    NO ASSET TEST FOR A PENSION EVER AGAIN!


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