New guidelines on the real cost of retirement have been recently released by Massey University

The 2021 Retirement Expenditure Guidelines provide information about actual levels of expenditure by New Zealanders who have retired. Pre-retirees can use this information to prepare for retirement, plan budgets for their desired future retirement lifestyle and provide a foundation from which to determine the amount of money and savings they need to achieve their retirement goals.

The 2021 Retirement Expenditure Guidelines provide information about actual levels of expenditure by New Zealanders who have retired. Pre-retirees can use this information to prepare for retirement, plan budgets for their desired future retirement lifestyle and provide a foundation from which to determine the amount of money and savings they need to achieve their retirement goals.

The document includes two levels of expenditure – a ‘No Frills’ lifestyle with a basic standard of living that includes few, if any, luxuries and a ‘Choices’ lifestyle based on a more comfortable standard of living, which includes some luxuries or treats. Click here to download the 2021 Retirement Expenditure Guidelines. 

The report states that retirement represents a substantial life change for most New Zealanders and is often included in lists of the most stressful life events. Sleepwalking into retirement is therefore not a recommended approach, rather it is important to prepare and plan for retirement.

One element of the preparation for retirement, and arguably one of the more important, is the question of financial resources required to meet a person's retirement needs.

It goes on to say for the Baby Boomers that have not yet retired, there is some urgency to this preparation as at most they now have eight years before reaching the age of 65, the age of eligibility for New Zealand Superannuation and widely seen as the retirement age in New Zealand. Retirement now looms on the horizon for Generation X, with the first of these reaching age 65 in less than ten years. While the Millennials have at least 25 years before reaching age 65, it is not too soon for them to start thinking about their retirement. 

If you’d like to discuss some the areas raised by the report or design some financial scenarios or analyse your future retirement, we are happy discuss this with you. We have some great financial modelling and scenario planning tools to see what your financial future might look like. If you have any questions about what this might mean for you, contact us or click here to book an appointment with one of our advisers.