I read an article from the Epoch Times in Australia recently. Apparently, Australia is the country most people around the world would like to live in 20 years time (presumably, this means when they retire).
So, how well does the typical Aussie live in retirement?
AXA (the big French multinational insurance giant) questioned workers in 26 countries and here is how the Aussies perform:
The average retired Australian EARNS $1917 a month.
The average retired Australian SPENDS $1437 a month.
By my reckoning, that means that the average Aussie is living an idyllic retirement lifestyle of $17,000 a year (I couldn’t buy much more than a Big Mac and a Starbucks Latte a day for that!) …
… and, for the really big yearly shindig, they have a whopping $5,800 a year spare to spend on holidays, cars, boats, cigars! By the way, these are Aussie dollars, so take off 20% to convert to US.
The concept of an ‘idyllic retirement’ in Australia (or the US, or most Western countries) takes a lot more money than that … unless, your only passion is surfing every day!
So how do financially astute Americans compare ….
… pretty similar: living off $27,000 a year in retirement, and somehow ‘saving’ $11,000 for all those fine things the Aussies are also chasing!
My question is this?
When you calculated your Number, was it anything like $30,000 or $40,000 a year? I bet it was MUCH MORE. And, that’s the problem with these surveys … they assume that you can (or want to) live off just 70% (or even 100% or 120%) of your current salary when you retire.
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Not to mention we have a retirement scheme here where by law your employer has to pay 9% of your pre tax salary into a superannuation (retirment) account for you!
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Aussie, Aussie, Aussie … oi, oi oi! Thanks ‘dieter’ …
… my Aussie friends do indeed get 9% into their ‘super’ (equivalent to 401K in the USA), WITHOUT needing ot make any ’employee match’ … it’s ‘free’ money! And, the Aussie government has just relaxed the rules on using that money to purchase ‘geared’ investments (eg real-estate with an attached mortgage)!
Now, it’s what you do with THIS money PLUS the stuff that you get to take home, Dieter, that will determine if YOU get rich! If that’s your goal, keep reading and contributing …
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in response to AJC – I just wanted to clarify that superannuation (or ‘super’ as we call it) is not ‘free’ money, it is more like forced retirement savings. It forms part of your employment package.
And I’m not sure if your comment about ‘And, the Aussie government has just relaxed the rules on using that money to purchase ‘geared’ investments (eg real-estate with an attached mortgage)!’ is correct, but think you might have the wrong end of the stick here. Most super money is held by superannuation companies that invest it in a variety of things, mostly the stock market, but also other assets (ie property and infrastructure).
It is possible to have what is called a ‘self-managed’ super fund where the individual invests the money themselves, but this is not very common, and comes with higher risk, a lot of fees and a hell of a lot of paperwork. Individuals who have their own self-managed super fund may invest in property, with additional mortgages, but as I said, it is not really very common.
@ Penny – Yes, I was talking about ‘self-managed super’; Apparently, I have one! 🙂 Thanks for the clarification.
But, is it possible to have a decent retirement in AU with an annual income of under $20K US per year
@ Tom – I don’t think so! 🙂
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