As Australia navigates its way through a period of economic turmoil, many grey nomads are anxiously doing their sums and assessing the potential impact on their ‘living-the-dream’ lifestyle.
Of course, there is no such thing as a ‘typical’ grey nomad. All have their own unique set of financial circumstances.
But, whether they are self-funded retirees or on a full pension, mortgage-free house owners or ‘my-van-is-my home’ fulltime travellers, all are affected one way or another by rising inflation, higher interest rates, and by the sheer uncertainty of what lies ahead.
Many older Australians are still scarred by their experiences back in the ‘80s when home loan rates hit a high of 17%.
Careful planning is key to keeping Big Lap finances on track. PIC: Pexels
And, while they are also in the ‘let’s-enjoy-it-while-we-can’ stage of life, the sums do still have to add up. The prices of food, power, and petrol have surged in recent months. In June, the inflation rate rose to 6.1%, its highest level in 21 years.
The Reserve Bank of Australia (RBA) recently raised the country’s cash rate for the fourth month in a row … and they’re probably not finished yet. That can, of course, be good for some investors, but it can also affect the performance of super funds.
National Seniors Australia says that grey nomads, especially self-funded retirees, need to get good advice and have a solid financial plan.
The organisation’s General Manager, Chris Grice, says grey nomads should be aware that what is available in government support can change over time due to changes in income and / or assets.
“At a point in time, a retiree may not have been entitled to government support but, with changes in the economy flowing through to investment incomes, this can change,” he said.
Mr Grice says many nomads Inflation, rising interest rates and the pandemic are impacting many budgets will be feeling the pinch particularly strongly due to the rising costs of vehicle repairs and fuel.
And the after-shocks of the pandemic are still being felt.
“We are seeing many of the towns and centres that were low cost to stay in temporarily, or for extended periods, by grey nomads now either more expensive or simply unaffordable for this cohort as new tree change or sea change permanents from the city have moved into town,” said Mr Grice. “We’re also seeing a squeeze on cheaper caravan park site accommodation due to rising land rates costs incurred by the park owners.”
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We have given up on the idea of the big lap. We will be staying in our home state and just having short holidays not too far from home. This year we have only been away for 3 weeks, well short of the six months we had envisioned upon retiring.
Fuel bill for last four months $3500..
time for a rest and prop for a while..!
The only thing that’s affected our travel plans over the past two & a half years is the Covid-19 pandemic.
We’ve hardly been anywhere & because of that our finances are looking great.