How YourLifeChoices’ retirement tribes were created

How they were created and why.

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 last year, 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 $74,813 and $42,767

This is the good life. To achieve this level of income, on current cash rates of 2.5 per cent (i.e. not from investment in the share market or property), a couple would need almost $3 million in savings and a single would need $1.7 million.

  • 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 ($231 and $116), almost double that of couples on an Age Pension who rent. Similarly, $31 and $21 spent per week on clothing and footwear is almost three times the Cash-Strapped average.
  • Recreation costs, including entertainment and holidays, are 20 and 16 per cent of expenditure, compared with nine and seven per cent for Cash-Strapped retirees.

Constrained Couples and Singles – homeowners on the Age Pension

Estimated annual expenditure $42,995 and $23,794

The maximum base Age Pension for couples is $16,354 each per annum and for singles $21,684. 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, 20 per cent.
  • The percentage spent on food was the highest outlay for couples (20 per cent) and the second highest (18 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 $36,177 and $22,743

  • The highest percentage of income, as expected, was in housing – 29 per cent and 36 per cent.
  • 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 four per cent) compared with all other groups.

How does your super affect your overall retirement income? The RetirePlanner™ tool has all the information you need.

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    COMMENTS

    To make a comment, please register or login
    MICK
    21st Oct 2018
    9:26am
    "Tribes"? Sounds like a football team.
    The figures you quote are wish list figures. People can survive on a lot less if they want to. Of course that means going without what most do not need anyway. There lies a story in itself.
    Old Geezer
    22nd Oct 2018
    6:09pm
    Gee I don't seem to fit any of them at all.


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