Episode 36 – Money Matters in Retirement – How Much Do You Need to Live a Comfortable Retirement?

How much money do you need to have a comfortable retirement? Bring out your retirement planners and calculator because this episode will be all about money, super, and old age pension.

Transcript

Wayne Bucklar: You’re listening to Booms Day Prepping, the Baby Boomer podcast – our regular chat with Baby Boomers about being a Baby Boomer. Despite all the things that come

with age including for me difficulty getting my words out remembering, who’s who and getting organized in time – it’s time for us to talk to you about money matters. Now money is one of those topics that perhaps we don’t feel like ever talking about, like politics and religion, you should never discuss money. Well today we’re going where no one else goes, money matters in retirement. How much do you need? And I think the answer is just “more.” As usual on our panel today we have Brian Hinselwood and Bron Williams but on leave of absence Amanda Lambros and Glenn Capelli, who for some reason have taken Friday off when we normally record and won’t be with us today. Here’s our host, Dr. Drew Dwyer.

Dr. Drew Dwyer: Hi Wayne. Hi panel, everyone. I hope you’re all feeling well. I’m about to dampen your whole day, probably, trying to keep the subject positive but it’s a hard subject matter to keep in a positive space because unfortunately once you unwind this subject matter and particularly for many Boomers – how much do I need to retire – you really have to start pulling apart a calendar or a timeline of events when first question to ask yourself particularly is ‘What age do you want to retire?” Most people of course would like to retire at 60, 65. Unfortunately in Australia the set retirement year now is 70 so you’ll all be working until you are  68 or 70 – 68 for women and 70 for men. And I’ll have to refrain or keep a framework around this conversation because I’m an Australian, I live in Australia for all listeners and I can broaden out but I’m going to focus in on the Australian context which is pretty much similar to everywhere else once you’ve done your adjustment of money and currencies. But the primary question ‘How much do I need to retire?’ – let’s aim for the age of 60 in a modern world, Western society. We are considered wealthy people as it is but let’s look at retiring at let’s say 60 of age. So I’m often asked this question by a lot of Boomers in counseling and in care work but really looking at the theory, the common rule of thumb is probably that you want to retire at 60, you’re going to need around 15 times the amount that you have already calculated of your after tax retirement expense. So if you estimate you’re going to need 60,000 a year to live on you’ll need to have a minimum of 900,000 in your Super. They’re pretty easy calculations, you can find these calculations just about at any bank and of course once many of my Boomers see these calculations in front of them they get quite disgruntled about that because the average Australian will probably retire with around in general around 200,000 let’s say I mean I’ll average it out – an average Australian will have 200,000 from male so 285-300,000 in their Super for a male and around about 183 to 85,000 for a female by the time they reach retirement age. Now this of course is because you’ve been spending your whole life putting your money away, working your Super but when you sit and do the calculations it’s more than the average that 270,000 for a male and 152 60,000 for a woman – it’s not enough. If you’re a couple where you can put it together and broaden it out but you’re going to need more or less as a couple around about sixty to seventy thousand dollars to live to meet your retirement needs and that’s a moderate or a comfortable retirement. So annually basically they calculate it out in about half a dozen sites I’ve been to to do the calculations in Australia and that’s a look at your annual retirement income for any person, male or female, you should be averaging out your income to be around 43,664 dollars a year which probably doesn’t seem a lot to people but of course there are other things they don’t tell you that are secretly hidden around this and that is that magic number around about 43 to 45 thousand also means that you don’t really want or need to have a mortgage. So that figure will blow out if you have a mortgage. So in other words be mortgage free, don’t have a mortgage on your belt, minimize your housing cost, your energy costs, your food cost, your clothing costs and then of course you’re going to have to factor in health and as we have discussed in the Boomer program the older you get, the more chronic and sick you will become and these things have to be taken into consideration. Transport, leisure, communication, so again on average no matter how you pull down, trying to be conservative, you’re going to need around about 56,000 dollars a year, 62,000 dollars a year to retire on as a couple. So that’s quite a large amount of money to come up with to live comfortably from say 60 to 85 and then of course at that rate you will go on to the old-age pension in Australia and the old-age pension of course is for a single person all up constitutes a maximum basic rate. That means you are until to the full rate of 826 dollars a fortnight, total amount if you’re taking pitch in supplement and clean energy supplement. As a single pensioner you’re getting 900 dollars a fortnight sits, around about four hundred and fifty and as a couple you’ll get around 684 dollars each so around about the 1,200 – 1,300 Australian dollar mark a fortnight. Now as most elderly now in Australia will tell you all the people you cannot feed a dog on the pension and it’s impossible to live on it, it’s a pittance. So conversation I want to have is what are our options? What do you feel are our options as a panel and as Baby Boomers, where do you sit yourself? I know I’m quite a bit away from retiring yet, I’m lucky I have military pensions to cash in on at some point but I still need to be able to make some form of income out of Supers or investments and I’m a long way of looking at a comfortable retirement. But I’ve been researching and looking at many of my own clients and many people that I’m being contact with the last 12 months that are now living overseas on their pension and many pensioners are retiring overseas from Australia because they can’t afford to retire in Australia. And of course Australia has arrangements with overseas countries, 31 of them to be precise, where you can take your pension overseas. However big fat warning to all Baby Boomers and pensioners in Australia, there are new rules in 2017 which you must go and read and have a decent good read over these things because it’s very confusing. You will actually lose the access to your pension as you start to notify the Australian government that you are going overseas to retire with your pension so there’s something else to consider, another thorn in the side. So I’m going to open up to our lovely Bron Williams, a woman in her 60s, a woman who house sits, a woman who’s in her third stage of life facing or dealing and dealt with the midlife crises. Can I say that Bron knowing you?

Bron Williams: Yes, you can.

Dr Dew: And establishing herself and of course you can see all of Bron’s stuff on her links in the Booms Day website linkage and Bron, where’s your thoughts on this? You’re a permanent house sitter and I’m going to read you a little story later about lady at 71 who does the same thing in Spain. And tell us your feeling about pensions, retirements, money and how much do you need and what’s your plan?

Bron: So my thoughts, I had some Super but like many women in my age group, Super didn’t sort of start to be part of my working experience until my mid-40s and also like many women in my age group I wasn’t working full-time. I was doing more part-time work supporting my husband, looking after the kids, that sort of thing and so my capacity to earn Super was not as huge. I did however get some and I decided at the age of 60 to actually take that and use it to step out of full-time work because I was looking to retirement age doing what I was currently doing and thinking I’m going to get to 67 and still not be in any better financial position because working for a not-for-profit, the chances of you being able to save money are not very big. So I figured that I had to do something, take a risk, so I took my Super and started my own business.

Drew: Bron do you think like many of us, you get to a certain age in your 50s, I know my wife’s done it now and I’m doing it when you sit with your accountants, you look at yourself really, you think and you realize, for me, “I’m way off the mark. How the hell am I going to get to that target?”

Bron: Yeah, I think that’s quite true and so I’ve taken a risk of using my Super to invest in myself and in the hope that I can develop something that will see me through and past the normal retirement age because I don’t want to retire per se at 70. What I’m establishing now in my coaching and speaking, I want to continue to do that, I would like to continue doing that until I’m 80 as long as I have good mental and physical health.

Dr Drew: There’s no reason you can’t Bron, I imaging being that you are a fit and healthy person.

Bron:  That’s right. So there’s a sense in which for me retirement is a non-entity because I just see that I want to be gainfully employed in my own business for the next 20 years. And during that time to earn sufficient money that I will be starting to put some money away so that when I no longer want to work at the level that I am now, I can do that on my own.

Dr Drew: Well I mean you fit the perfect candidacy of the modern Baby Boomer and that is redefining retirement as we’ve discussed in this podcast a couple of times. There’s a big message I send out to a lot of people I deal with, I know it rattles the cages but retirement has been redefined and will continue to be redefined by the current Boomer market and for you, what you’re saying and to sum it up for our listeners is that retirement for you is going to be a lived retirement or a semi retirement, a growing retirement. You are setting yourself up now in your 60s Brn with a counseling, coaching little business that’s going to give you in a passive or not, an income on the side or enough income to allow you to continue to live the life you want to you really reach old age and then you’ll live on what I’m told the smell of an oily rag by most of the people who live on the old age pension. Let’s move on along to Brian. Brian, come on my thespian friend, share your experiences in your 70s of what this subject means to someone like you?

Brian Hinselwood: Yeah, I think this is a very interesting topic because it’s kind of how long is a piece of straw? It depends very much on what you want to do within your retirement. I mean if you just want to sit, watching television all day or do you want to travel or what is it you want to do? Obviously if you want to travel as most people do, or a lot of you, then you’re going to need more money and I don’t think anybody except maybe the top 1% of any country in the world actually has enough money to retire on. And again, as Drew mentioned before, I can only speak for Australia trying to get the pension here you have to go through the hurdles and do a course with the Marines – it’s just almost impossible now to get the full pension. You can get health benefits, you can get travel benefits from local transport, things like that, but trying to get a full pension out is seriously difficult and I think when you’re talking about how much money you need, I’d have to say I think it depends on the lifestyle you want to to live and I can understand why so many people go overseas. It’s generally speaking, particularly if you’re moving to somewhere in Southeast Asia which a lot of Australians do then it’s much cheaper to live. Obviously there are disadvantages too. You’re away from, in a lot of cases, you’re away from first class medical facilities and things like that. The amount of money you need, I don’t think it’s a question anybody can answer.

Dr Drew: I mean if I give you the basic breakdown, according to MYOB, money matters in the ASFA, the Australian Superannuation Fund, basically it’s telling us 432 dollars a week, broken down to 60 bucks for housing, $40 for energy, food $74, for clothing $18, household goods $26, health $37 – which makes me laugh – transport $93, leisure $71, communications $9 which makes up a total of $432 a week. An average spend per year of around about $23,000 but I mean they’re all hypotheticals if you ask me. The fact is many people spend too much in their retirement.

Brian: The other this is Drew is that I don’t know how old those figures are but let’s say in the last years, in five years time that’s all going to be different.

Dr Drew: Absolutely Brian. The cost of living is going through the roof.

Brian:  Energy prices particularly are going through the roof. Transport costs are going up almost as we speak. Certainly running a vehicle like petrol costs are just ludacris so those figures that you just quoted now, I have no doubt at all that they’re based on very good research but in twelve months’ time they won’t mean anything.

Dr Drew:  Yeah, they’re coming out of the March quarter of 2018 Brian so they’re quite current but the ASFA I often wonder when they sit and do these figures, are these figures being made by 70 year olds who are actually doing the living or are they made by Millennials who would sit there telling us how much we actually need to live on.

Brian: Yes, one of the figures that you mentioned there was food which I think you said was $77 or $79. You’d be hard pressed doing a weekly shop for $74.90 now.

Dr Drew: Well absolutely. They’re saying as a couple, the shop should be $192.60 a week. But I mean calculate that out, if that’s a modest comfortable lifestyle, you do that as a pensioner and I know I deal with a lot of old pensioners in their 80s, late 80s and 90s. I mean Brian they are living without electricity or heating, they’re doing it the old way, the sausage is a long piece of material filled with packing cloth so it stops the drafts from going under the door for those who don’t know what a sausage is. But no gas, no electricity, blankets, hot-water bottles, they’re back to living in the dark ages in a modern world because I’ll tell you very clearly just their medications alone to stop their fridges and what they need is impossible and most of them will go without and recycle food and keep it for as long as they can because they just simply cannot live on the old age pension in a modern world.

Brian: Which is disgusting.

Dr Drew: It’s offensive and every Australian listening should be highly offended at it.

Brian: Yeah, absolutely. Particularly in a country like Australia which is supposed to be this wealthy country.

Bron: I just thought it was interesting, it struck me when you said the cost of medications which is accurate. It’s almost like we have dug our own grave in a sense. We are able to live so much longer now and longer reasonably healthy lives because we have the medication to keep us alive and healthy but that medication actually because we need that we privilege that in terms of our spend over food or heating. I’m just you thinking 50 years ago we didn’t have the drugs that keep us alive and so we died earlier but we maybe we ate better or I don’t know. It was just one of those random thoughts, it’s our ability to keep ourselves alive in a sense, that’s actually contributing to the difficulties we face.

Brian: Yes.

Dr Drew: Here is a classic, only this week and I will use pseudonyms so let’s call her Barrel. Barrel, 92 year old lady that I’ve been helping out the last few weeks locally around the corner from my house because quite frankly she needs it, lives as she tells me on the smell of an oily rag. A full pensioner, she sits at home every day, doesn’t  go anywhere, she enjoys her book, she likes her TV, she has her penchant for peaches and custard, that’s what she basically lives on mesh and bangers and mash and peaches and custard. She can’t afford the groceries, can’t afford the vegetables because they’re too expensive. Now she just injured herself and needed a dressing done, not covered under the Medicare benefits, not covered under the scheme, package cost wasn’t going to cover what she needed. Now on the calculation of what she required, $195 call out fee for the nurse to come to the house, $90 an hour for the nurse to be there to do the dressing plus the cost of the dressings. I worked it out over the weeks that she’s been needing those dressings, those dressings are going to cost her a thousand dollars a week. Now who in their right mind can think that a pensioner retiring and injures themselves, she had a bad wound on her leg, but if it wasn’t for me living around the corner being who I am, knowing this lady and going in and doing this small task for her every day with my own resources, she would have laid in that house without the right nutrition, without the right benefits, without the right anything and basically probably got sepsis, rotted away and died in her bed. And no one would have given two stuffs about her and so I get very passionate about it. I look at retirees and particularly later retirees, it’s important that we understand “You need money to retire not simply because you want to have a great life, because simply you have to survive in a modern world. And if you haven’t got the connections in your families and of course we understand this is hypothetical but it’s true that people disconnect, they’re isolated. Families were sort of detach themselves away from their elderly. Who the hell keeps you surviving in your head above the water level?” She explains to me the medications alone even though she gets a health seniors card in Australia costs her a lot of money to keep her pills and potions and things and refrigerator and it’s just shocking. And really I look it and go “How long you’ve been living like this Barrel?” She says for that long now, it’s just her life, it’s what it is.

Brian: The other thing is this particular lady Barrel that you’re talking about and I don’t know whether she has her own house or whether she rents or whatever but either way if she’s renting, it’s costing her a fortune. If she’s got her own house, it’s costing her a fortune by the time the rates and power bills and all the other things that need to be done to live in a house so it’s not just the food and the medicine. It’s just being in the place she’s in, whether she’s renting or own it.

Dr Drew: Absolutely. I’ve been talking and interviewing a lady at the moment who is living in Spain. Now Australia has a pension arrangement in Spain but as I said before, everyone who looks at retiring overseas has to be careful about these. And the interesting thing is though you cannot get this information from Centrelink or our Department of Human Services or Social Security. You cannot get the data that you require to make a clear decision, they don’t have it and they can’t publish it. And of course you try and get other data from other resources, you cannot get it. So be very mindful about what I’m about to talk about and as a matter of advice, my suggestion is everyone should go and sit with a proper planner and the early you plan the stuff the better you will be. This lady made the decision to move over to Spain, she’s 71, she was living in Western Australia. She said she couldn’t live, could not in her Australian pension, her cost of Supers, everything else, she just could not get past seeing herself alive in ten years time from retiring. She made the decision to move, she went and moved into Spain five years ago. She spent some of her Super and savings and so forth, about 60 odd thousand dollars of it to renovate a 3-bedroom home, two-bathroom. She paid $21,000 for the for the property, she lives there, the pictures are quite nice when I talk to her. She’s living in the olive groves on the hill in a little town, she has a little hospital down the road, she gets all the help and services she needs, she lives comfortably, she can feed herself down the road from a local restaurant for under $10 for a three-course meal. Her rates are set around … rates are 110 euro it’s about 175 bucks bills are 120 and 192 bucks and she basically allows her pension to pay her bills and she’s living a nice healthy lifestyle. She walks everywhere, she’s in a little village and she has made it very clear that if it keeps going at this stage for her when her retiree visa is up in Spain, she’ll probably take Spanish citizenship. And she’s made the very clear decision, she’s decided she will die in Spain and that’s what she’s going to do. And she has family in Australia, she visits them once a year. They more enjoy visiting her overseas and she says she sees them more now than they see her because they come over. And talking to others, Cambodia and Thailand are other places to go but when a pensioner can sit there and look at those costs and retire themselves up, they’ve clearly understand, I’ve got a couple I’m looking at and reading reports on and talking to them through the internet – they’re a couple that retired before 65 because they wanted to retire early they went to Thailand they now stationed themselves in Thailand in Chiang Mai and they now do what you do Bron. They house sit all around the world for other people.

Bron: Yes, trusted house sitters.

Dr Drew: Yes and they have 41 countries that they’ve been to now and they’ve got a website of their own called Frequent Travellers and their basic that lifestyle is at home in Thailand six months of the year the other six months of the year they’ve planned out where they’re going to stay around the world, free of charge living in someone else’s home to protect and look out for someone else’s property and privacy as a 65 year old. And pets, the whole lot as you can see there with Bron. And they are absolutely loving it and they’ve said it’s given them 15 more healthy years in retirement. They’re learning other languages, they’re happy and free and they just know they will retire, they have an unencumbered home in Australia which they rent out. That’s their final resting place, they’ve made a decision to go home to. And of course they’re going to spend as long as they can in this platform of six months in Thailand, six months somewhere else in the world on little visas, they travel around, house it and live a nice free comfortable retirement. They do it on a budget.

Brian: And I think that sort of creative planning, if I can use that terminology, it is really really good but obviously not everybody can do that. And when you’re talking about the lady previously Drew, obviously she’s 92 I think, she’s way too old to do that so I think we’re going to end up with this kind of bubble thing that in 15 maybe 20 years time, you’re suddenly going to have thousands of people that are now retired that don’t get a pension and can’t afford to live and can afford to pay power bills and rent and mortgage.

Dr Drew: Absolutely Brian. A lot of these experts that you read up on and there’s plenty so there’s a plethora of information but just be careful what you read. I only go to evidence-based stuff, once I read it, I generally ring and contact the individual that made the publication so I can get it from the horse’s mouth. But the good news is that $500,000 estimated in Australian purpose is Super, is purposeful. It’s less than the 700 to 900 thousand that you’ll need to live a comfortable lifestyle. The bad news is the average total Superannuation of a couple on a balance of 428,000 falls well and truly short of the required estimates for a comfortable lifestyle. It means you’re not on that amount of money being entitled to an age pension any way so you’ve missed out. You have to make do with that money until it runs out then you have to scream poor to the government to tell them you now have nothing left and you require the age pension. So I mean when you look at the entire spectrum of this, I tell all Boomers right now if you’re aged between 52 and 72 and looking at retiring or have started to retire, you need to make sure you are going to live on sixty thousand dollars a year. And for those with champagne tastes, there’s the beer budget for you. Those were sent champagne tastes, expect to have at least a hundred thousand minimum income a year and if you’ve got that, good on you. There’s that quite a quotable Chinese proverb it says “The best time to plant the forest was 20 years ago because the next time is now.” Planning is the key Boomers, always, and it’s been a conversation, a message I send in my books and everything I write and talk about the Boomers: Prior preparation prevents a piss-poor performance. So you’ve really got to understand that Message. You’ve got to plan and I have no doubt, I have my own family members that clearly will say to me “Retirement, who cares? I’ll just go on the old-age pension.” And I hear this a lot, “I’m an Australian, I’ll get the old-age pension.” But really? Exactly what is that old-age pension and will you actually get it?

Brian:  Yes. I will just go back to what I’ve said a minute ago, I think in 10-15 years time, you won’t have a pension. You’ll have benefits, by all means you’ll have benefits but you won’t have a pension.

Dr Drew:  That’s right. I mean for me and my wife, we look it very clearly is that she will have to probably keep working longer and she understands this. She is not happy about it so she’s already now in her mid 50s setting up more intellectual property stuff, more investment stuff for herself, for her own portfolio which is important as a woman. If I died and left her, I mean as a woman Bron you can either equip me or tell me off but women need to be protected and still and I think women need to be able to be secured in their retirement.

Bron: Yes, because still a greater issue for women.

Dr. Drew: Yeah. The housing issue we’ve spoke Bronwyn and it’s another issue now on the market or on the table in Australia. So many women around the world, America, in Western society becoming very risky of homelessness and in Australia we have a massive homelessness issue borderline for Australian women and it needs to be addressed because women in Australia traditionally have lived on that aspect that if they have an old-age pension they will get looked after by the government. They’ve raised the family, they’ve been the backbone of Australian society and they forego unemployment, raised a family support the

husband, do the traditional values and now we’ve taken such a big swing the other way of we’ve discussed, these older women are going to get left out of the picture. And quite frankly everyone’s wiping their feet on them like a doormat going “Yep thanks for setting it all up. Now Bob’s your uncle. Power on. Good luck to you.”

Bron:  I think that’s one of the things that I was thinking about is we’re talking through all of this is it comes back to what is retirement and is is a time just to stop and enjoy yourself? Or is it just another part of life? Like I see myself as being in the third season of my life and that this is the time of life that I’m actually going to do something significant. So yeah for me, retirement is not those sort of physical thing.

Dr Drew: I mean but Bron we spend three-quarters of our life in the timeline working. Most of us do that in a job we hate so why should anybody want to spend three-quarters of their life in a shithole? In a bad place, it’s just a job and believe it or not many people do this and so I ask everybody for a moment cast yourself out to the social media, you’ll see so much of this. Positive, energize, motivate be yourself, reach out, go hard blah blah blah You can have the life, cappuccinos and smashed avocados. And you see it all the time but the reality is, it’s a never grabbable moment. Most people want it, they’re looking for it but unfortunately they’re working that three-quarters of their life in the drudgery to get out of it.

Brian:  I think one of the other thing Drew and Bron –  Bron you just touched on it – you’re now in the third stage of your life, you’re really just trying to find yourself now. You’re starting your business, you’re trying to kind of look after yourself which really means that the first three thirds of your life, I’m not saying you’ve wasted because you raised the children and done all that but imagine what would have happened if you’ve done this at 20?

Bron: Totally.

Brian: Most women don’t.

Dr Drew: I get touchy Brian. I have millennial children, I’ve said this before, their life is a lay down misere I’m telling you now. And we’re tough on my kids, my kids work, they go to university and work. We do not give them handouts, we can’t afford to give them handouts as other family friends or their families give their friends handouts. And they say “But their parents gave them this, their parents gave that.” I say to my kids “Sorry Tony too hard of an answer, can’t do. You’re going to have to work, you’re going to have to value money.” And they do a great job of it my kids, they really do and I give them kudos for it. But when I look at the millennial generation they all live a pretty good life, much different life to I lived when I was in my 20s and I can tell you now, I was busting my thumb hole off to work, to pay bills, to have a life, to entertain myself, to live because my family had nothing for me. I came from a poor family with nothing. And as my children grow, they’re looking at their parents, us, my wife and I, we at the moment are very conscious about planning retirement. My 20 year old you daughter only recently said to us “You two are always talking about retirement.” And we just turned to her and said “Honey this is the stage of our life. We have given probably 30 years of our life to raising you and your brother and now that you are all independent to a point, we need to spend the next 30 years of our life thinking about us and what we’re going to do because I don’t want to spend the next 30 years working to be able to live.”

Brian: Yup.

Bron:  And I think. like what you said Brian is so true like if I’d been able to put my energies to what I’m doing now 40 years ago, fantastic – but it wasn’t an option, it wasn’t a thought option either in general society.

Brian: Yes.

Bron: So one of the things I see that is so encouraging for me with the Millennials and those a little bit older is that option is there. So I’m hoping that women who are like my children’s age will not find themselves in the potential situation that I do and many other single women in my age bracket do of looking at potential homelessness or how can I support myself because they will have established a business of their own. They’ve done some sort of entrepreneurial venture, they’ve got some residual income and that will always be there. So it is a changing face of work and employment and I think that’s a good thing but in the end we’ve still got to face what we have to face.

Brian: Yeah.

Dr Drew: I mean they make it very clear when you do look at any of the research and information, we always bring the aspect up for retirees about financial security. It’s the biggest buzz word, it’s the word you see, it’s the implant word to the subconscious, it says to an older person “You need financial security.” What does that mean? It refers to peace of mind and what you’re talking about Bron is that how do you get to that third stage and I know many people here that it’s the financial security that is their problem because their peace of mind is always unsettled.

Bron: Yes.

Dr Drew: You need to be unworried about your income and you need to be unworried about how to cover your expenses and how to cover emergencies so when you break down financial security even further, it then it brings up the concept of financial stability and minimum financial stability which clearly states an emergency fund enabling you to fall back into security when times get difficult or hard but to achieve it, you must have all charges and credit charges, debts removed, all bills paid off and no mortgage and a secured incumbent home.

Bron: That seems like Fantasyland.

Dr Drew: Yes, that’s exactly right. I mean you ask this person over 60 look at you and go “What?”

Brian: Yes.

Dr Drew: They have probably cashed in their mortgage three times to help their children.

Brian: One of the other problems Drew is being the oldest of our little group here, certainly when I was in my 20s nobody ever, I don’t remember ever seeing anything that would suggest that at the age of 65 or whatever the retirement age then, you wouldn’t get a full pension and you wouldn’t be looked after by the state. Things have changed dramatically and I equate it to smoking. Like when I was a kid people smoked because they thought it was cool or whatever. Nowadays people smoke and they know all the health risks. People at my age, not that I’ve ever smoked, people my age can be excused for not knowing the risks. It’s the same with the pension, people at my age never imagined it would be this bad when they got to this age. Young people today can see it happening in front of them, your twenty year old daughter Drew can see it happening in front of our eyes. She should be now and I’m sure she is because you’re her father and you’d be nagging her to death if she didn’t but she should now be planning from when she’s 65.

Dr Drew: Well we have that conversation with her. She’s as I said, she’s watching us, we’ve actually taken the moment to sit and show her a few things. Now she’s just about to become fully registered nurse in Australia so on average her salary will be around $70,000 a year. Not a bad start at the early 20s. As I’ve said to her “Once you’ve finished and been in the work space for a year and got your credit line behind you, your mother and I need to sit down and see how we can assist you and support you and get you into your very first property.” Now her immediate response was “I don’t need a property mum and dad, you’ll leave me yours.”

Bron: Oh my goodness.

Dr Drew: And I said “Of course I will darling but you’ll have to fight that out with your brother.”

[Laughter]

Brian: “Not only that, your mother and I might spend it before we go.”

Dr Drew: Oh we’ve warned of that mate. I’m going out kicking and screaming and farting I’m telling you right now.

Brian:  Yeah. It’s interesting, Megan my wife bought her property when she was about your daughter’s age, maybe a little bit older 22-23 and the interest rates then in Australia were 18.5%

Bron: Yes.

Brian: The interest rates were obscene.

Dr Drew: Yes.

Brian:  But she got into her first house and she managed to do it and yes, good advice. They need properly, you can’t go wrong with property unless you buy on the side of a cliff. Eventually  you’re going to be swamped by rising tides and stuff.

Dr Drew: Well I think in this show now we’ve got a few minutes left but we talked about and we’ve really outlined some of the costs and to all listeners who are overseas, this interest we aren’t talking about Australia as Australians but it’s very much a broad across. It’s a broad brush on retirement, it’s pretty much the same on whatever first world country you go to and depending on how they structure their superannuations and their government pensions and all countries are different but it’s pretty much it averages out, America, UK, Australia, Europe. But I want to end with everyone giving us their three tips of personal tips for yourself to give to other people on what are your three things that you believe you have to achieve to get financial security in retirement. So I’ll begin with mine while you have a think and I’ll give you mine. I think the first tip for Baby Boomers need to understand, practice now in early end or third stage of your life to live below your means. It’s something I have to learn to do, is to get a really tight budget around me and learn to live below what I currently live at and learn to get in that space. Keep everything simplified, get it down to the basic minimums. I often do think of you Bron and think wow I wish I could live like you. Not out of a suitcase but out of with minimal and be able to move very quickly like our friends in Thailand I just discussed. So keep it simple and downsize and of course once you’re there, you understand it, my third point is stay the journey. Stay the course, keep on that program for as long as you can and stay happy in that program and work towards holding that financial security that you are comfortable in, to live below your means to downsize and do things on the minimum and to stay that journey and be happy in it. There’s my three tips. Bron what are yours?

Bron: Well I will reiterate one of yours which was to to downsize. Whether you do like because I have with house sitting but I think it’s actually important going through your stuff if you’ve been in your house for 20 years, you will have so much stuff that you actually don’t use so downsize, so that’s number one. Part of sort of a corollary of that so I’ll make it number two is decide what’s really important to you, that’s one of the things that I have done has been the sort of a result of doing the downsizing is I have now kept the things I really want. The possessions I really want, the things that reflect who I am and perhaps who I am at this stage of life because so many of us keep stuff from when our children were little law when we used to have big family parties and there’s just the two of us or just yourself. Just keep the things that are actually applicable to yourself, the remaining pages of right now.  And I think thirdly is keep open to opportunities because you may not have, like I don’t have the financial security that I want but I’m keeping my eyes open to see what could come my way. So I think that would be my third piece of advice.

Dr Drew: Beautiful three points Bron. And Brian?

Brian:  You two haven’t left me with anything. I do agree with everything that you both said but certainly living within your means I think if it’s the number one priority. I think one of the problems of people of any age have is thinking “Oh yes well I’ll just buy that because it’s on sale but I don’t actually need it, but it is on sale.” So living within your means I think it’s vitally important as Bron just said there in finding something that you want to do that will keep you active I think it’s really important. And as an actor of course you never retire. I mean you can be out of work for 20 years but you’re not retired, you’re waiting for the next job to turn up. So I think it’s very important to be doing something whether it’s house-sitting, whether it’s gardening, or whatever it is doing something that will keep your mind ticking over. And I don’t just mean sitting in front of the television doing a crossword which is perfectly good I’m not mocking it but we need to be doing things to keep your mind active. And I think the other thing is age is very much a state of mind for me. I think if you see “Oh my god I’m whatever age I am,” then it kind of drags you down mentally and I think if you drag down mentally then you drag down physically and you drag down in every other way so I think try to keep a little bit of like trying to do to things. And I have to say I agree with you Drew, what Bron is doing with the house sitting  appeals to me massively and we’ve used Trusted House Sitters many times when we go away.

Dr Drew: Trusted House Sitters everyone.

Brian: Yes, we’ve used them. We go away, people have come in look after our animals, look after our plants, look after the house, they’re brilliant. So that’s my advice, do something that you want to do.

Dr Drew: Alright, excellent words of advice there from the panel. On our last minute, no turn for your Wayne, before you close us up, really the conversation today centralizes for me it always comes back and I do wear the badge of the badge of honor for bringing it up – but it is emotional intelligence. Another lesson on emotional television for Baby Boomers to listen to this podcast and just open your mind, be reflective, be objective, think about yourself and your situation where you are, remember big message today: On average in a Western society, in a modern world, comfortable retirement, you should be planning on around about from the age of 65 onwards you’re going to need individually $45,000 a year to have a comfortable retirement. Don’t rely on the age pension, you may not get it. There are options, move overseas, have a look at what the Baby Boomers are doing in other countries, don’t be afraid, to question, to investigate, to ask. But there are options open and Baby Boomers have endless options to them. Stay young and fit and stay in control of your life. You can always buy my book because it has lots of messages in it about this and I do love a good book plug. So thank you everybody and thanks Wayne.

Wayne: You’ve been listening to Booms Day Prepping, the Baby Boomer show. Today we’ve been talking about money matters in retirement. How much do you need? Why are so many people retiring overseas? What do you do if you just don’t have enough? We’ve been talking with our panel Brian Hinselwood, Bron Williams and our co-host Dr. Drew Dwyer. My name is Wayne Bucklar, this is Booms Day Prepping, the Baby Boomer podcast.

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