Survey launched to find the real cost of retirement
How much money do we really need in retirement? This long debated question is set to be answered as a new survey, launched today, examines how much New Zealand retirees are currently spending on everyday living.
The New Zealand Centre for Personal Financial Education - a joint initiative between Westpac New Zealand and Massey University - and savings industry body Workplace Savings NZ are to conduct an in-depth survey of those already in retirement to establish their cost of living in real terms.
The New Zealand Retirement Expenditure Survey will look at the retirement spending patterns of 300 New Zealanders and will take into account different costs for metropolitan and provincial locations. It will establish guidelines for ‘modest’ and ‘comfortable’ retirement lifestyles. Experts from Massey University will lead the research.
Suzie Marsden, Acting Chair for the New Zealand Centre for Personal Financial Education (NZCPFE), says it is of increasing concern that many Kiwis have no idea of the real cost of retirement and are ill-prepared for it financially.
A recent Westpac survey showed that 42 percent of New Zealanders don’t know how much money they need to save to live comfortably in retirement.
“We hope that this new survey will establish how much money is required to live a ‘modest’ and ‘comfortable’ retirement lifestyle allowing New Zealanders to understand exactly how much money they really do need to save. I am sure the results will surprise many.”
Workplace Savings NZ Chair David Ireland says that the survey is intended to be conducted annually to include the effect of inflation and aims to add some science to the retirement savings debate. He expects it will give Kiwis useful indicative figures for expenditure on core budget items like transport, health and energy.
“It will also be broken down to show the difference in cost between cities and rural centres, acknowledging that these amounts can vary hugely depending on whereabouts you plan to retire to.”
Retirement Commissioner and (NZCPFE) board member, Diana Crossan says that the survey will raise awareness and help people to make important financial decisions earlier in their lifetimes. She also believes that the survey will contribute valuable additional data to the retirement debate.
“One of the Commission’s main goals is to help New Zealanders make educated and informed financial decisions. The survey is a step in the right direction to ensuring that people are armed with the right information to make realistic and achievable plans for their retirement.”
Massey University Vice-Chancellor Steve Maharey says the University is committed to applying its expertise to improve the financial literacy of all New Zealanders.
“As a University it is our responsibility to apply our knowledge to real-world issues. Through this joint initiative with Westpac, we want to ensure the next generation are empowered to make the right financial decisions so, when retirement comes, they will have prepared for it.”
The launch was attended by Finance Minister Bill English.