What’s the cost of being comfy?

How much does it cost to be you? To walk in your shoes, to make your moves, to live your life?

That’s the very question Anna is asking herself as she enters her 60s, the decade in which she will likely retire from the paid workforce.

If you’re wondering who on earth Anna is and what she has to do with your retirement – let’s get you up to speed. Anna is our collective avatar. Over the past month, she has been guided through a lifetime of common crossroads with her key decisions made on the whim of social media polls. 

With retirement planning now firmly front of mind, Anna wants to know how much money she’ll need to live comfortably without a salary or wages. The answer to this question can be found in the Association of Superannuation Funds of Australia (ASFA) Retirement Standard, a quarterly report which tells us that the annual cost of a “comfortable” lifestyle is $73,077 for a couple, or $51,805 for a single. 

To achieve this, Anna will need a super balance of around $515,000 at retirement, or a combined balance of around $660,000. And once she hits 67, receiving the Age Pension can help pad things out. 

However, if Anna is living alone in her 60s – as almost 60 percent of Aussie women in this decade are – this relative comfort could well be out of reach. 

Why? Because, as we’ve explored over previous decades, gendered systems and structures have claimed a disproportionate amount of Anna’s time, energy and brain space. And often at the cost of her professional advancement. 

“Someone might say thank you to us for it – and okay, that’s nice – but it’s not like it’s hitting our bank account,” says Dawn Thomas, senior financial advisor at The Wealth Designers.

Between the ages of 60-64, the average woman has 42 percent less in superannuation than her male peers. That’s a pretty grim reality for too many women as they get older, and something our country should be more agitated about.

But that’s not to say it’s too late to shore up your economic standing in your 60s. 

“There are a lot of people passionate about increasing the capabilities of women in the community,” says Dawn. “Look for those programs that are getting groups of women together. The Greenhouse and Ladies Finance Club are great ones.” 

Anna may want to factor travel into her retirement funds and join a growing number of women globetrotting in their early retirement years. On the home front, downsizing could also be on the cards. The timing of these choices will be critical.

“Some people think ‘I’ve got to immediately downsize because I’m not going to have enough money!’ But if you downsize, for example, at around 67, that can actually be held against you for Age-Pension purposes,” says Dawn.   

“We can pinpoint when someone needs to downsize, but not everybody has a financial advisor. So just be aware – and challenge that panic.”

Three in four retirees own their own homes, according to Grattan Institute research. But among those who rent in retirement, more than three in four are single women who live below the poverty line.

In a trend being labelled the “Golden Girl effect” – referencing the famous TV show where four unattached, 50-plus women live together – co-housing scenarios allow like-minded women gain security under the same roof.

Communal living is one solution. But how do we avoid it being the result of financial hardship later in life, rather than an individual choice?

“We can have these conversations sooner and help this younger generation get in front of it, so they’re not having to share the fate of what’s happening to women,” says Dawn. 

“If I didn’t end up as a financial advisor, I’d be one of the statistics as well. Because a lot of us have not been raised to think about these really important topics.”

With world-wide studies showing a gap in financial literacy emerge between boys and girls before they start school, Anna will want to be talking to the young women in her life about investing for financial independence in the longer-term. 

As will you. 

Here is how Anna is looking in her 60s, according to our votes.

After being diagnosed with a serious illness, Anna pursued aggressive treatment and invested in long-term care insurance. She also adopted a cat, paid off her mortgage and created a legacy fund for her adult children. Now retired at 65, Anna has embraced a new passion project and is saving for future travel adventures.

Join us for our Choose Her Own Adventure: Where To From Here? online event on May 28, featuring financial experts Natasha Janssens, Lacey Filipich and Dawn Thomas, and hosted by FW Deputy Managing Director Jamila Rizvi. Click here to register.