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Only two-person provincial households living a ‘no frills’ lifestyle came close to being funded by super alone, the study said, though they would still need savings of $77,000.
Most New Zealanders aspire to a better standard of living in retirement than can be supported by government superannuation alone.
That is the key finding of an annual Retirement Guidelines Expenditure report by Massey University, pointing to inflation as the main reason why pensioners on super alone were finding it impossible to make ends meet.
Financial Advice NZ chief executive Katrina Shanks said the report was a reminder to plan for retirement.
“We need people to realise it’s essential to start thinking seriously about their retirement and what sort of lifestyle they want to lead when they get there,” Shanks said.
“Unless they do this from an early age, and put a plan into action, they will struggle to live the lifestyle they want to once they stop work. These guidelines clearly show what people need to aim for.”
Guidelines set out in the report estimated a single pensioner living in a metro centre would find a ‘no frills’ lifestyle cost about 20 percent more than it would for those living in provincial areas.
The report said the no frills guidelines reflected a basic standard of living that included few, if any, luxuries, while the ‘choices’ guidelines represented a more comfortable standard of living, which included some luxuries or treats.
It estimated an average weekly no-frills or modest lifestyle would cost a single person living in a metro centre $781.07 a week, while one with choices would cost $1107.12, versus an after-tax super payment of just $462.94 a week.
Couples living in metro areas on a super payout of $712.22 a week would also fall short of maintaining a no frills lifestyle at $931.17 a week, with the cost of a choices lifestyle rising to $1578.15 a week.
Only two-person provincial households living a no-frills lifestyle came close to being funded by super alone, though they would still need savings of $77,000, while couples in metro areas would need $191,000 in savings at retirement.
A choices lifestyle would cost quite a bit more to maintain.
A two-person household would need $755,000 in savings to fund a choices lifestyle in the main cities, or $480,000 in the provinces.
While there is no retirement age in New Zealand, the age of eligibility for superannuation is currently 65.