Retirement doesn’t come cheap

EXECUTIVES should plan for their retirement now because it won’t come cheaply, says Channel Nine Money Show host Paul Clitheroe.

“To me the typical executive forgets that nearly everything you get is paid for by someone else. We are grossly and outrageously spoilt,” Mr Clitheroe said.

“When you come off, the music stops and you’ve got to pay for it.

“All of a sudden you may find that if you are currently spending $60,000 a year on your lifestyle, you may well find you need $100,000 to maintain it.”

Mr Clitheroe said about 97 per cent of retired Australians were living a retirement where they did not have a choice about how they live.

He said the idea that a couple could live off $300 a week was a dream if they were used to more money.

“One of the great joys of being at work is you can’t spend money when you are doing it,” he told a recent Australia-Israel Chamber of Commerce luncheon in Perth.

“It is a real plus – and all of a sudden when you retire from your senior posts and you are thinking that all the invites to the corporate boxes will come for ever – think again.

“You aren’t ever going to get invited again. People who you think are your friends are suddenly just your acquaintances and no longer return your calls anymore because you are no longer powerful.”

He said people who aimed to retire at 55 and wanted to spend $100,000 a year would need $1.7 million in capital plus their house paid off.

Mr Clitheroe believed it was important for executives to have money set aside so that at any time they could tell their bosses where to go.

“Well known as f… off money, it’s a very useful thing to have,” he said.

“Those with f… off money tend to keep their jobs longer than people without f… off money because people without f… off money are bum lickers. If they have got f… off money, they are more likely to tell you the truth.”

He said it was good for the business to have financially independent staff.

But, he said, the cost of living the retirement dream could be very expensive.

“Freedom is a very important thing, but I think you will find freedom is a bit more expensive than you first thought,” he said.

“If you have been poor all you life, then being poor is probably acceptable. But not if you were a well paid executive all your life.”

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