The amount you need to retire just went up (again)

One of the most common questions client ask us is “how much money do I need to retire”. The answer of course depends on the lifestyle you want to have in retirement and other things like whether you will own you own home mortgage free. However, what seems to be consistent from the research is that retirement costs keep creeping up.

What does the research say on this?

The 2021 Retirement Expenditure Guidelines from Massey University suggest an average couple will need an extra $809,000 to top up their superannuation for a comfortable "choices" retirement in one of the main centres - or $511,000 to live in the provinces.

Couples who are happy with a lower-budget "no frills" lifestyle should still put aside $195,000 if they want to retire in a metropolitan area, and $75,000 to retire in the provinces.

Considering the average KiwiSaver balance is a little over $25,000, New Zealanders have a long way to go to avoid "sleepwalking" into retirement!

Are superannuation (pension) increases keeping up?

The guidelines say the key inflationary drivers for superannuants for the 12 months ending 30 June this year were transport, housing, and household utilities. While superannuation rose 3.09 percent in April to $436.94 per week for a single and $672.22 for a couple, the report said it wasn't enough by itself.

It said couples above the age of 50 should be putting at least $77 in the piggybank each week and ideally up to $917 each week.

How can I check if I’m on track?

Please contact us if you would like help to review how you are tracking for retirement. We can help you find the answer using publicly available tools from reputable independent websites such as Sorted, so that you will have the knowledge and confidence to keep track yourself in the future.