Your postcode significantly affects the cost of retirement

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Your postcode can significantly impact the cost of living in retirement, but many super funds ignore this, offering one-size-fits-all recommendations on super that may ruin your post-work years.

According to financial consultancy Milliman’s Retirement Expectations and Spending Profiles (ESP) report, which analysed 300,000-plus retirees’ real-world annual expenditure, superannuation funds don’t personally figure on the costs required for retirees to live in some areas.

“Where the median 65-69-year-old retiree lives can affect their annual spend by more than $10,000,” says Milliman.

The report revealed that the Stonnington region in Melbourne is home to Australia’s biggest spending retirees, with the average annual household expenditure required to live there sitting at around $56,711 – two-thirds higher than the national average of $33,943.

A retirement in the Caboolture region in Queensland could almost be entirely funded by the Age Pension. It’s home to the lowest spending retirees, who have an average annual expenditure of around $26,286 a year – 26 per cent lower than the national average.

And while Stonnington is home to big spending couples, data shows that the average super balance needed to sustain their spending habits would be just over $403,000 which is still lower than industry forecasts. Most of this, however, is spent on leisure or discretionary items.

Caboolture retirees spend 60 per cent of their annual budget on essential goods and services whereas Stonnington retirees spend around 44 per cent. Also, Caboolture retirees spend 19 per cent of their total expenditure on food, nearly twice as much as Stonnington retirees (10 per cent).

These results question whether super industry recommendations accurately reflect the reality of retirement costs in some areas. Super fund members aren’t receiving personally tailored advice to suit where they live – or intend to retire – that might stretch their retirement savings further.

The Milliman report highlighted the problems of using the Consumer Price Index as a benchmark, because falling prices of some discretionary goods and services could distort the true impact of non-discretionary costs, such as food, electricity and gas, which are rising much faster than inflation.

Read more at www.financialstandard.com.au

Do you think you’d be better off living somewhere else? Did your super fund make accurate recommendations based on where you live?

Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

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Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

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65 Comments

Total Comments: 65
  1. 0
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    Does welfare (old age pension) take into account your postcode?

    • 0
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      Stop it OG. We all know old age pension is an entitlement, not welfare. So for you own sake, so you stop making a fool of yourself, just stop.

    • 0
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      ph – you will never stop OG. He has a problem with the age pension because he probably misses out and wants to call it welfare. Just let him be, he will be in his coffin singing: I Did It MY Way.

    • 0
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      Well the pension is welfare there are no buts about it.

    • 0
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      I am confused O.G, are we talking about welfare or the Old Age Pension, they are two entirely different things. Maybe you should take a step back and think about what you actually want to discuss, one or the other.

  2. 0
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    Choice-mobile – that’s what it’s all about…. if you want the ‘higher’ lifestyle and ‘prestige’ of living in a good spot – you pay for it.

    I’m happy with the bush, thanks….. added cost of travel but hey …

  3. 0
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    I live in Stonnington. It’s a great place to live.

  4. 0
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    Is the overblown pensions and allowances paid to retired politicians also welfare” or does that only apply to the general plebs?

  5. 0
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    So what are people expected to do? If the area in which you live is too expensive there are a couple of choices; move to an area which is cheaper or take out a reverse mortgage to cover any shortfall. Super funds can only work on an industry averaged figure as different areas can become more popular or less popular from time to time.

    If we take this ridiculous thought to its extreme, age pensions will need to be tailored to an area. Someone living in Toorak on an age pension should be getting four times the pension of those living in disadvantaged suburbs. Further, those in disadvantaged suburbs should have their age pensions reduced because its cheaper to live there. What a lot of rubbish.

    To those who think that this is pie in the sky, Plibersek’s head was all over the media this morning firstly telling the lie that there is a gender gap in pay and, secondly, announcing Labor’s latest thought bubble that women on maternity leave will have money paid into their super fund. No matter who pays for this, either the employer or the government, those who stay at work will suffer. If an employer has an added cost ontheir business, prices must rise and if paid by government, taxpayer money which could be used for the benefit of all taxpayers will be unavailable.

    • 0
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      People are also telling her that they will have to pay back a lot more in tax when they retire to with Labor’s unfair policies as well.

    • 0
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      As long as the super payment is equal to the baby-bonus and paid instead of not as well as, then I see no reason why it should not be paid into the woman’s super. Provided of course that a single man or the stay at home male in a partnership is also entitled to the same amount. Then of course remove the baby bonus for anyone unemployed (it will go into their super too).

      Again the devil will be in the detail: will this be some arbitrary amount or will it be based on the income and therefore the super the person had immediately before the baby? For how long will the super be paid? In many places women can take up to 12 months maternity leave with a further 12 months by agreement from the business. Will this super contribution continue until she decides to return to work no matter how long that is? Will it be means tested or will everyone with a baby get it? After all, even the high fliers lose salary and super when they take time out to be a primary carer!

      This is a stupid policy, ill-considered and ill-thought out. But no doubt a vote catcher from those with their hands out for ‘more’.

    • 0
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      How stupid is Pilberseck !!!
      Can’t stand that woman

    • 0
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      At least one person should be at home looking after the kids not farming them out to child care. Why have kids for someone else to raise? Any super paid during child rearing years should be split between both partners. Why should the taxpayer pay for women to retire?

    • 0
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      Too true, OM – this is effectively paying someone at a higher rate of pay for the same job…

      I’m sure that point would go right over Tanya’s head… not in the feminist interest…

      Take twelve months off – get paid for it… and/or get paid super @ 9% – which effectively means you are being paid at a rate of 9% for the time off HIGHER than the others…

      I’ve done figures before that show that women are effectively receiving more per hour worked than men.

  6. 0
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    This is the same stupid argument OAP’s use for increasing rental assistance .
    Lump it or move !!!
    Taxpayer shouldn’t fund your lifestyle choices

    • 0
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      Long bow – long way off target….

    • 0
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      No its not.
      Unlike you, I’m always on point

    • 0
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      Your credibility disappeared at the point of the Great Royal Commission Robbery – you know – that one that was set up to demonise Unions and Labor – and when it found no real meat to chew on – you and one other here came up with the fantasy that the result was doctored so as to preserve those very same Union and Labor people…and maybe some other shadowy characters hidden somewhere deep within the labrynth of political collusion and control by one party pretending to be two…..

      Anything to throw mud at the current Opposition – and especially to throw mud at Unions… RC come up with a clean skin and a heap of rhetoric indicating nothing – but the REAL result (ooooooooowwwh) was buried to protect people…

      Tell it to the psych nurse at lights out time….

      I won’t be voting for the current Opposition in The Tag Team – but I don’t see any credibility or ‘being on the point’ there…. the point of mental collapse perhaps…..

    • 0
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      Let me just try to expand for you a little here:-

      Current Labor and LNP – neither want strong Unions. Strong Unions exerting power of their own undermine their basic thrust to ‘bring about the correct revolution’ (or evolution) to ‘create a viable and egalitarian society’ in which ‘all will prosper’.

      The ideologues at the helm now may approach this from different directions – one from some pretence of a genuine egalitarian society byt their rules only – the other from the absolute myth of capitalist enterprise and ‘trickle-down’ that purportedly benefits everyone (LMFAO)… to EACH of these ideological positions – GENUINE power of the people is anathema…

      In their eyes, the people common are but cattle in the fields to be guided and disposed of at the whim of the governing power…. they – the ruling elite of either ‘left’ or ‘right’ – are the only and final arbiters of what is best for society…. the people be damned as long as they themselves prosper..

      I guess, for your learned brethren out there, that could mean I’m something of a Trotskyist – well – I never studied that kind of division between different ideologies and never have adhered to an ideology – nor those ideologies as such – I merely see what I see.

      I’ve warned you all about the robber barons – I’ve warned you all about the dire peril of a feminised Australia under current uni quadrangle sidewalk cafe Labor – ignore reality at your peril.

    • 0
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      For your next puny attempt at a bite…

      If this be madness… Jailer – BRING ME MORE LIGHT!

    • 0
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      Trebor , can I humbly suggest you Contact your local AA branch.

      You completely went off topic again with yet another boring self gratifying rant

      I was on point – you can’t complain about your lack of super if you have an expensive post retirement lifestyle . Just like a pensioner can’t complain about their rent if they choose to live in a blue chip suburb
      Duh !!!!
      Which part of living within your finite income don’t you understand ??????!!!

    • 0
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      Missed the point entirely…. oh, well….

      You can’t raise rental assistance for pensioners in rich areas without raising it for all equally …. that’s the way our socialist system even under LNP works here … so really it’s a moot point…. and I’ve already addressed it elsewhere.

      On the other hand, perhaps a calculation of pension rate could be undertaken to resolve what is and what is not a genuine living allowance for all pensioners that includes costs of housing , owned or rented *…. some might benefit more via living in cheap areas… but that’s their windfall….

      * some here have already raised the point that home owners have ongoing costs, too…… and perhaps they should also receive an allowance for costs…..

    • 0
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      Rinse and repeat

      Which part of living within your finite income don’t you understand ??????!!!

      Duh !!!!!

    • 0
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      People weren’t complaining about lack of super, BTW – you missed the point – they were complaining about the inadequacy of pension…….. Pension… PENSION…”What about some nice lady from Bellevue Hill who has not worked but did the ‘traditional’ thing, and who then finds that when her husband dies, she is left without super- since all the funds are tied up in trusts and such and she has no or little access – and she is forced onto pension while her kids romp with the trusts?

      What does SHE do for household costs? What if the house was ‘owned’ by a trust’ and she is given her marching orders?

      What does she do when she is forced to rent a one-bedroom cold water walk-up for $600 a week – more than the pension? Does she eat dirt?

      Don’t laugh – when money is involved, families can be filth.

    • 0
      0

      Is that the taxpayers problem?
      So we should give her more in welfare than what is already a generous system

      Bloody hell – put that drink away and go to bed Trebor

    • 0
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      “living within their finite income” – so suddenly the sky-rocketing cost of housing is the fault of the Pensioner?

      And the Pensioner should dig into the purse for the thousands required to move to a cheaper area far away from friends and family?

      I thought Reynhard Heidrich was killed in .. what was it… 1943 or 1944? Yet the ‘intellectual Nazi’ reasoning goes on – put the old bastards on the trains and send them to Ostland where Arbeit will make them Vrei!

    • 0
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      It’s not welfare – it’s Social Security bought and paid for over a lifetime of contribution… do some research.

      Keep going – you might take a trick sometime….

    • 0
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      Btw – the more genreous OAP welfare becomes the more you will get the sort of example you gave above

      It will become more of an incentive For families to arrange their affairs such that the older members maximize handouts

    • 0
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      Really – where’s Rainey to tell you that attacking those with a part pension – as the LNP did – will create a future system of all rorting so as to get benefit…..

      **pours another beer** this is easy money….

    • 0
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      Scheme in which all get pension – but with stringent requirements that you pay tax on all benefits over and above….. it’ll settle in in time…. like any necessary change, it will hurt a few who really won’t be hurt while benefiting the majority …

    • 0
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      Bed time – I’ve got a reno and need to sleep a little….

      Cheers….

    • 0
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      You just made my point ,unfortunately you’re too mentally challenged to too drunk to realize
      I’m off to dinner . Sick of talking to peasants who are unable to rise above their unfortunate surroundings
      Some people at least try, you don’t even make an effort

    • 0
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      Oooh – now that’s what’s called a slagging… dinner at 2.11 am? Hmmmmmmm…….an Offshorian preaching to Australians…. oh, well…

  7. 0
    0

    It has NOTHING to do with where you live, it’s how you live that matters.
    Live within your means.

  8. 0
    0

    A pension is not welfare.
    In a egalitarian society everybody should get the pension unconditional and without asset testing.
    Those who eared millions in their lifetime and paid proper high level taxes have funded the commonwealth pension coffers.
    So what if they get the pension too and just use it for cruises they also deserve it.
    And no this does not apply to me.
    I do not have money in the bank or credit for any cruises.

  9. 0
    0

    The UK Aged Pension is available for everyone regardless of whether they are rich or poor. This is the way it should be in Australia. And as a bonus then we wouldn’t have self-righteous, po-faced whiners decrying those who do rely on the Aged Pension and calling the Aged Pension welfare.

    • 0
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      Politics of Envy – when Thatcher’s writers came up with that one – they forgot that every sword is at least two edged… in this case three or four edged….. same as Tony’s and Joey’s ‘entitlement’ … these knives cut many ways….

  10. 0
    0

    A older lady where I live went into a local shop as she had heard that the owner had been gossiping about her . She hit the nail on the head when she said “your opinion means nothing to me” then walked out . Look if someone wants to call the age pension welfare who really cares , his opinion means nothing !!! Stop taking the bait ha ha

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