Majority of Kiwis just scraping by in retirement
The majority of Kiwis are just scraping by in retirement, a new report has shown.
The Fin-Ed Centre (Financial Education and Research Centre) – a joint initiative between Westpac and Massey University – in conjunction with Workplace Savings NZ, has released New Zealand’s first Retirement Expenditure Guidelines, which shows 47 per cent of retirees don’t feel they have adequate financial resources to meet their retirement needs.
The report shows 33 per cent are not satisfied with their retirement, and 46 per cent say retirement is not meeting their expectations.
A two-person household in Auckland or Wellington would need $241.35 per week for a ‘no frills’ retirement, while a couple in provincial New Zealand living the same lifestyle would need $244.24 per week.
The cost for a two-person household to live a more fulfilling ‘choices’ lifestyle, that includes some luxuries, was $761.56 per week in metropolitan areas, and $693.83 per week in regional New Zealand.
In addition to this, retirees need to cover housing and associated costs such as rates.
Current NZ superannuation payments for a couple are $536.80 per week.
The report showed around half of retirees had income in addition to their NZ superannuation, and more than a quarter of retirees supplemented their income with some form of paid employment.
While most are getting by, there is little left over for quality of life.
More than one-third said they almost never ate takeaways and two-thirds went to a restaurant no more than a few times a year, and 22 per cent of those surveyed said they never went overseas.
Fin-Ed Centre director Pushpa Wood said: “This survey is a wake-up call for people to stop and think about the sort of lifestyle they would like to have in their retirement. The good news is we all have the power to dictate our retirement lifestyles if we start saving early enough.”
Workplace Savings NZ Chairman David Ireland said: “This is one of the most important pieces of research to come out in the retirement savings space in recent times. The guidelines provide a great resource for financial advisers to pull out of their tool bag as part of the advice process. Finally we have some practical data to help inform all New Zealanders in properly planning for their retirement, sobering though the results might be.”
‘No Frills’ – A basic standard of living that includes few, if any, luxuries.
‘Choices’ – A better standard of living that includes some luxuries or treats.
*Note The Financial Education and Research Centre (FinEd Centre) was formerly known as New Zealand Centre for Personal Financial Education