Retirement Expenses Planner Australia
Estimate your household spending and get a free summary.
Splitting expenses into these two groups is usually more useful than one combined total, because they behave differently as circumstances change.
Essential
Housing costs, utilities, groceries, health and insurance, basic transport. These tend to stay fairly steady and are the floor your income plan needs to cover in most years, including weaker ones.
Discretionary
Travel, dining out, gifts, hobbies, upgrades. These are the first things most households trim in a lean year, and the first things that expand once the essentials are comfortably covered.
One-off vs recurring costs.
- Recurring costs — groceries, utilities, insurance premiums — are what a fortnightly or monthly income figure needs to cover.
- One-off costs — a car replacement, a roof repair, a big trip — are better planned as separate lump sums than folded into an average weekly figure, which tends to understate the years they land in.
- Aged care and health costs often shift from discretionary to essential later in retirement, which is worth flagging even if it’s a long way off.
Adjusting for inflation.
A spending figure that looks comfortable today can fall behind if it isn’t reviewed. Essentials like groceries and utilities are usually the most exposed to cost-of-living increases, while some discretionary spending can flex to absorb a tighter year. Revisiting the split every year or two — rather than setting it once and assuming it holds — is usually enough to keep the plan realistic.
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