NZ Super is not enough, but most retirees doing OK
The Retirement Expenditure Guidelines measure the real cost of retirement.
The latest Retirement Expenditure Guidelines confirm New Zealand Superannuation is not sufficient to fund the retirement most people want, but most retirees are satisfied with their level of retirement income.
The guidelines, which are produced annually by the Westpac Massey Fin-Ed Centre, calculate what retirees currently spend to maintain either a ‘no frills’ retirement, or a more fulfilling ‘choices’ lifestyle that includes some luxuries. Costs are calculated for one and two-person households in both metropolitan (Auckland, Wellington and Christchurch) and provincial areas.
The report, which covers the 12 months to June 30, 2018, shows all households, including those groups with a ‘no frills’ lifestyle, have a gap between expenditure levels and New Zealand Superannuation. Report author, Dr Claire Matthews from the Massey Business School, says a two-person household living in a city would have to save $785,000 to fund a ‘choices’ retirement, while a couple living rurally would need to save $492,000.
“While living on New Zealand Super is possible, for the vast majority of New Zealanders it doesn’t support the lifestyle they wish to have,” she says. “This report reinforces the need to save for retirement if you want to set yourself up to have the retirement that you want.
Housing-related expenses were the main contributors to rising costs for retirees, including home ownership, property maintenance, property rates and insurance. This was offset to some extent by reduced spending on fruit and vegetables and recreation.
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