Well, the answer to that question is pretty depressing. At current interest rates, savings of $1 million will earn you about $33,000 a year. If you are lucky.
Jeremy Cooper, a superannuation expert and retirement chairman at Challenger in Sydney, is the latest to enter the debate on how much you really need for a comfortable retirement.
Cooper’s argument in the Australian Financial Review this week is that everyone thinks about their retirement savings in terms of a lump sum and not in terms of the income it will generate for the rest of their lives. His startling conclusion is that at current interest rates, a million dollars in super will only generate the same weekly amount as the current age pension for a couple.
We all know that even if you own your own home, you are not going to have much fun on $635 a week. And after you have paid out for electricity, council rates and health insurance, you are really looking at about $500 a week. If you run a car and use toll roads, the money you have left over to pay for food and, god forbid, medicines, is even less.
That is why so many Australians (Americans, Canadians, British and Germans) are retiring to Southeast Asia. They want a better life at lower cost.
At Planet Boomer we have interviewed dozens of these retirees throughout Asia.
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