How much do people like you spend in retirement?
When it comes to retirement planning, the first question most people ask is: How much do I need?
Unfortunately, there's no one-size-fits-all answer to retirement. How much you'll need will vary from person to person and depends on when you want to retire, where you live, your health status, family situation, lifestyle, and outstanding debts, such as a mortgage.
Importantly, how much you’ll need also depends on how much you're likely to spend in retirement, which can be hard to gauge if you haven’t experienced it.
That's why we’ve created Compare my spend — a new online tool to help you understand how much people 'like you' spend in retirement.
Powered by anonymous spending patterns from over a million bank customers, Compare my spend allows you to find out what retirees near you and with similar incomes spend each fortnight on things like bills, groceries, and entertainment.
Spirit Super CEO Jason Murray said Compare my spend will give people a more real-world and personalised view of how much they’re likely to spend in retirement.
"The lead-up to retirement can be an anxious time. People want to know if they’ll have enough to live comfortably. They don't want to worry about how they'll pay the bills or if they can afford to travel to take a holiday or visit friends and family," he said.
"The Compare my spend tool provides unique insights into the expenses of retirees in your region. It gives a much clearer idea about what you're likely to spend in retirement and will make a huge difference when planning how and when you'll retire."
Apart from offering a glimpse into potential future spending habits, the tool provides crucial insights into how spending changes throughout retirement.
"We've always known people spend more in the first few years of their retirement compared to ten or twenty years in," said Jason. "That's usually when we're embracing life after work, travelling or indulging in new hobbies. But we now know exactly how much that changes."
"For example, in 2021, the average 75-plus-year-old spent about $32,000 per year, while the average 60–64-year-old spent about $41,500. That's a significant difference and demonstrates how your financial needs change throughout retirement."
The data also shows that most people will spend significantly less on groceries and eating out as they get older. Unsurprisingly, health was the only spending category to increase over time.