Older Australians: Where are they spending their money?
As life moves forward, it is important to be more mindful of where our money goes, and how we allocate our spending. This is particularly relevant at retirement, as our regular source of income can change from wages to a pension. Recent statistics released by the Australian Bureau of Statistics outlines the spending habits of a range of ages within Australia, with some interesting results, particularly with regards to those nearing, or at, retirement age.
Average Spending – how does it compare across ages?
In their most recent report, the ABS detailed that the average weekly expenditure among Australian households was $1,425 on goods and services. This figure was significantly less, however, amongst Australians who are aged 65 years and over ($888) and those aged 75 years and over ($671). This is a stark contrast to the average weekly spend of, for example, 35-44 year olds – $1,716. The makeup of this spending for older Australians tends to consist predominantly of basic goods and services – particularly health care, housing, food, energy and transport.
Where is the money coming from?
Households in Australia in age brackets 65-74 and 75+ reported that their main source of income was from government pensions and allowances. While this is a relatively stable and predictable source of income for many over a certain age it does not necessarily lead to a comfortable retirement and it does highlight the necessity for sound financial planning earlier in life. For what it’s worth, you’re never too young to start planning for retirement, including getting the right investments, structures and safety nets in place, long before you leave the workforce.
What are older Australians putting their money towards?
A highlight from the report indicates that Australians aged 65-74 spend the highest proportion of their total expenditure on recreation (at 15.5%), perhaps contrary to the notion that younger age brackets would take out this category. Both of these outcomes are indicative of the priorities placed on leisure in retirement – something I’m sure we can all understand! Again, this further reinforces the need for robust retirement planning earlier in life to ensure your desired income needs will be adequately covered when the time comes.
Putting in place your retirement plan doesn’t have to be a headache – the team at McKinley Plowman are perfectly equipped to help you understand your financial position, demonstrate how you are tracking to meet your goals and aspirations and develop your own personal roadmap to get you where you want to go. If you would like the opportunity to speak with one of advisers about your financial future and how we can help ensure you are on the right track please give us a call today on 08 9301 2200 or visit www.mckinleyplowman.com.au/contact-us/.
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