Main drain on retirement savings

The rising costs of energy are starting to bite retirees hard, according to the data from YourLifeChoices’ Retirement Matters survey.

Nearly 6000 members took the time to complete the survey on a range of topics related to retirement, and findings showed that there was a variety of opinions when it came to the biggest drain on financial savings.

The question asked members to rank eight different expense areas (healthcare, energy costs, housing, insurances, recreation, transport, food and drink, and communication) in order from the smallest drain on their savings to the biggest, on a scale of one to eight.

Energy costs came out as the biggest drain on the savings of retirees, which is no surprise given the way they continue to spiral out of control. However, energy costs were only narrowly ahead of healthcare costs (5.56 compared to 5.36) as a weighted average. Insurance costs were not far behind the leading two either, at an average rating of 5.16.

While energy costs had the highest total average, more people (22.82 per cent) rated healthcare costs as the no.1 biggest drain on their retirement savings than they did energy costs (21.61 per cent).

At the other end of the spectrum, recreation was considered the smallest drain on retirement savings, with more than a quarter of respondents (27.88 per cent) rating it as such, perhaps reflecting the fact that recreation expenses are non-essential for those who are in the cash-strapped retirement tribe.

Housing expenses also provided some interesting results, perhaps reflecting the difference between those who owned their own homes outright and those who didn’t.

There were 16.55 per cent of survey participants who considered housing expenses as the biggest drain on their retirement savings. However, 19.11 per cent considered it the smallest drain on their retirement savings.

Do these survey findings reflect your own view of retirement expenses?

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