Is $60kPA really enough to retire comfortably?

Just for the record, we spent around $80k last year to keep a family of 4 going (including 2 teenage kids) and no mortgage. This included about $8k worth of depreciation on cars, washing machines etc. There was no overseas trip in this, but a couple of local ones. We eat out a couple of times a week, run 2 cars, 4 mobile phones, and 2 streaming services. Without the kids and the need to drive to work, I think we could live on $60k and be quite comfortable.

But having said that, I have friends with housekeepers and designer tastes who would feel like they were struggling if they had to make do on $100k...

 

Seems from reading the post in this thread, it all depends; but not necessarily on the amount of income you have. Always a want versus needs scenario.

 

True. I certainly didn’t plan on only meeting our “needs” in retirement. Like to have the “wants” also. As you say very different for each person. We like to live well and have stuff such as a swimming pool, ducted air conditioning, various hobby items, large higher maintenance decks etc. But not interested in flash cars (single 12 year old Kluger), expensive overseas holidays and dining out a lot etc. And I certainly don’t spend on flash clothes unlike you @SatayKing who dress Armani even to go to Bunnings.

 

We did both for some years until this FY when purchase of 2nd IP for development refocussed us. Intent was to have exposure across business, shares (via Super) and property, and leverage available tax opportunities.

 

@Cimbom, my post was definitely not aimed at you at all. It was just an offhand comment about my own ideas and circumstances. Everybody comes to their own conclusions about what is best for them and I respect that. I enjoy traveling as well but after nearly 14 years of living in a different country as a migrant, I enjoy being at one place a bit too much now.

Also, as a fellow Canberran, I would never diss you or your ideas. Especially a fellow Belconnen resident (if I remember correctly?)

 

@Jason007 "Living Off Rent"

 

Living off rent.

 

Tch, tch @austing . Someone has to maintain standards. Mind you I lost mine years ago whereas some never had one.

 

It really comes to where people live as well.
80k for a family of 4 is definitely not enough in Sydney!

I would be aiming to 80k for each adults at least!

 

I guess the theory is that they won't be children by time you get to that stage. All of us started at different ages and have different circumstances though.

 

LOL, very hurtful remark. Yes much to my wife’s displeasure that would be true when it comes to my dress standards. But the positive thing is no one has ever been interested in mugging me to steal my wallet. As looking at me they would likely assume it’s empty.

 

Assuming your retirement assets are in that tax haven Super: its tax free Peeps. It's not like raising a family in Sydney on a $60k salary.

 

If the kids have left home & you have no debt on your PPOR?

Some of us don't have any Super.

 

We talked this through last night and think you're about right there, albeit we're in Brissie. It all depends on when you see yourself retiring, what you intend to do, and what you're accustomed to I suppose.

 

Yes there are a high proportion of self employed forum members living off rents on this forum. But most PAYG employees have the opportunity to employ the tax advantages of superannuation.

 

some also set up SMSF, this can also work well.

 

I thought everyone did this, have a significant investment in shares and in property.

We have shares in our SMSF and property in our own names/trusts as we couldn’t pick a winner out of shares and property.

 

and now your multiple category winner !

 

Living off Rent.

 

Yes rent growth is pretty decent in capital cities (lagging price growth), but there are risks you can't control, such as:

• Tenants defaulting on rent
• Supply risks (Most of my Sydney properties are units)

Also quite considerable holding costs which eat into cashflow, including:

• Insurances
• Vacancy periods
• Repairs/maintenance
• Refreshing every few years

I typically budget 35-40% of gross rents for these holding costs.

Whereas with shares (via LICs) I have exposure to ~100 blue chip companies that I'm confident will grow their dividends faster than inflation over the long term, and cost me at most 0.16% to hold. I have zero control but quite happy with this arrangement for a care-free retirement.

Perhaps I should've said a combination of rents and dividend income is best.