The real cost of living in retirement

Posted by Bruce Kerr on 14 March 2012

New research being sponsored by Workplace Savings NZ will show the real costs being faced by current retirees and highlight what is needed for retirement lifestyles in New Zealand.

The survey is being carried out in conjunction with the Centre for Personal Financial Education (NZCPFE), and aims to produce expenditure data for 'modest' and 'comfortable' retirement lifestyles.

Workplace Savings chair David Ireland says as a nation we have long debated the question of how much savings is enough, and KiwiSaver was launched to help Kiwis save.

"But the fact remains that many New Zealanders have no idea of the real cost of retirement, and are not prepared for it."

"The survey aims to tap into the knowledge of existing retirees in assessing the gap between their income and current spending patterns," he says.

New Zealand Super will deliver a single retiree $339 per week (after tax) and a couple $522 (after tax).

"We want to create meaningful information that will help individuals who are wondering how much will be enough when it comes to their own retirement savings.

"We think everyday investors will benefit from knowing how much it actually costs to live in retirement. Only then can they see what sort of retirement life-style the combination of NZ Super and their private savings will produce for them," he says.

Mr Ireland says a similar in-depth survey in Australia has been published for some time by the Association of Superannuation Funds of Australia (ASFA).

"Our research will benchmark current retirement expenses in New Zealand. People in the workforce planning for their own retirement can use that benchmark to assess the adequacy of their own wealth accumulation plans.

"We are very excited about this research initiative. Amongst other things, it should provide a powerful discussion tool for financial advisers helping investors plan their retirement savings goals," says Mr Ireland.

Workplace Savings NZ is planning to launch the inaugural research findings at its national conference in Auckland on 16-17 August.

For further information:

Bruce Kerr
Executive Director
Workplace Savings NZ
Ph: (027) 284 0481   

  

David Ireland
Chairman
Workplace Savings NZ
Ph: (021) 343 615

 

Note to editors:

  1. Workplace Savings NZ is the voice of workplace savings in New Zealand. It is a national, not-for-profit, apolitical membership organisation whose mission is to advance the sustainable, effective, and efficient delivery of workplace savings outcomes for all involved. Workplace Savings NZ members manage or advise on the bulk of the $25 billion in workplace retirement savings assets (as at September 2011).
  2. The Centre for Personal Financial Education is a partnership between Westpac New Zealand and Massey University.
  3. Modest vs Comfortable retirement lifestyle:

Modest retirement lifestyle -
Better than the NZ Super, but still only able to afford fairly basic activities.

Comfortable retirement lifestyle -
Enabling an older, healthy retiree to be involved in a broad range of leisure and recreational activities and to have a good standard of living through the purchase of such things as; household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel.