Kaspanz welcomes the ” Long John” contribution to the retirement income debate and issues. Using the non de plume Long John, he/she is an experienced operator, and will appear on the Kaspanz site every so often with pithy comment
The Elephant’s still in the room
But it seems that not everyone likes to talk about it.
According to new research reported on the Commission for Financial Capability’s website, “many New Zealanders underestimate how much filling their shopping trolley in retirement will cost them. But they also don’t realise how well KiwiSaver could help them meet those bills”.
The Commission estimates that between $250-300k would be required to pay for the groceries in retirement, and notes that the study “is already motivating people to join KiwiSaver or add a little bit more to the amount they save each month”.
But hang on a minute. At current rates, a single person living alone for 30 years will receive $600k from their New Zealand Super. So that’s the groceries taken care of (plus a lot of other living costs).
The Commission has it the wrong way around. New Zealand Super is designed to meet basic living costs like groceries. KiwiSaver and income from other sources help pay for a better retirement, on top of what NZS can provide.
Incredibly, New Zealand Super is not mentioned in the Commission’s discussion of the costs of groceries in retirement. In fact, the whole piece reads as marketing for KiwiSaver. Is this what an independent agency is supposed to be doing?
Contrast the Commission’s approach with, say, Westpac’s Spring KiwiSaver Scheme update. Westpac references Massey University research, the contribution of New Zealand Super and the top-up that will be needed for a more comfortable retirement.
Even Westpac’s reporting is a little selective (Massey finds that not everyone is facing an income gap) but at least they’ve shown due respect to the Super pachyderm slumbering in the corner. Should not the Commission for Financial Capability – aka the Office of the Retirement Commissioner – do the same?