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Rising costs of living hit retirees

Retirement may be an inevitable part of life but a majority of the retirees are not happy with their changed lifestyle, according to a new Survey.

A Report accompanying the Survey said that while 33% of the respondents said that they were ‘not satisfied with their retired life,’ about 46% said that life after work was ‘far below their expectations,’

“A majority of Kiwis are just scraping by in retirement,” the Report, published by the Fin-Ed (Financial Education and Research) Centre, said.

The Centre, headed by Wellington based Dr Pushpa Wood as Director, is a joint initiative of Westpac Bank and Massey University, supported by Workplace Savings NZ.

According to Dr Wood, the Report also contains New Zealand’s first Retirement Expenditure Guidelines.

She said that 47% of retirees did not have adequate financial resources to meet their basic needs.

Harsh reality

Current NZ superannuation payments for a couple are $536.80 per week.

“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 is $761.56 per week in metropolitan areas, and $693.83 per week in regional New Zealand,” Ms Wood said.

She said that retirees faced many other expenses including housing and associated costs such as council rates and water rates.

The report said that about 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 of the respondents said they almost never ate takeaways and two-thirds went to a restaurant no more than a few times a year, and 22% of those surveyed said they never went overseas, the Report said.

Wakeup Call

Ms Wood said that the Survey was a wake-up call for people to stop and think about their retirement.

“The good news is that we all have the power to dictate our retirement lifestyles if we start saving early enough,” she said.

Workplace Savings NZ Chairman David Ireland said, “This is one of the most important pieces of research 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 practical data to inform all New Zealanders to plan properly for their retirement.”

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