Retirees still shop till they drop

A new survey has uncovered some bad – but not so surprising – news for women as they near retirement.

“No doubt the spending patterns for women are different to men… women spend more on clothes and hairdressers, and unfortunately this doesn’t change when they enter retirement,” Pauline Vamos, chief executive of Association of Superannuation Funds of Australia, tells DPS News.

The association’s survey on retirement expenditure, conducted last month, highlights the areas where the average retiree spends their money and shows that the costs of entertainment, transport and food have risen.

“Perhaps the main message of our survey is: if you’re not yet retired, then you should be thinking now about how much money you have today to see whether you will have enough income to provide you with a comfortable or moderate standard of living,” Ms Vamos says.

She claims people do not often understand that it is “quite expensive” to retire and retirement often lasts for a “very long” time.

“You will be retired for a long time so money has to last when you’re retired,” Ms Vamos says, adding a woman’s life expectancy after retiring is reportedly 18 years and 14 years for men.

“This means retirees will need a retirement income of about $50,000 a year for 18 years after their working life ends,” she adds.

The survey’s results show between the June quarter 2011 and the September quarter 2011, retirees had a 0.2% decrease in the cost of food, but over the year to the September quarter, there was an increase of 6.4%.

The cost of water and sewerage services also rose by a substantial 8.6% in the quarter, with property rates  rising 5.2%, and electricity costs rose on average by 7.8%.

Based on the survey’s findings, Ms Vamos advises all Australians to study their income needs in the early and later stages of retirement.

“You need to look at your income needs because they will change. You will need to look at how you are going to sustain that level of income over time.

“The basic advice is the earlier you plan, the better off you are going to be,” she says.

Are you excited by or dreading retirement? Share your thoughts by leaving a comment in the box below on whether or not you are surprised by this survey’s results.