Are you already retired? Click here. Survey Attitude to Saving for Retirement
How Many Years Will You Have in Retirement?
How much will you need?
Calculate how much you need in retirement
When should you start saving?
How much do you currently get with New Zealand Superannuation ?
Why do we retire at age 65?
Statistics in Australia show that the average age of retirement is 57 – with the majority of those retiring not doing so by choice. We believe New Zealand would not be too different. It is prudent to base your retirement age as being around age 60.
"The best way to be certain of your future is to create it"
(Dr E Vos, Personal Financial Planning, 1996) Survey Attitude to Saving for Retirement
This is the results of an Australian survey 2004 but the results are applicable to New Zealanders.
Source: ANOP Research Services, National Survey on Community Attitudes to Saving for Retirement. Seven in 10 non retirees estimate they will need a minimum annual income of at least $30,000 per annum to support an adequate lifestyle in retirement. In 2001, almost almost a quarter of those polled said they could live on $20,000 per annum. Close to 50 percent do not believe their current savings will achieve a desired standard of living in retirement. Eight in 10 would consider working longer in order to fund their retirement. Sixty oer cent nominate selling or downsizing their homes to pay for retirement, compared to the one in six actually doing so.
How Many Years Will You Have in Retirement?
New Zealanders are living longer; life expectancies have risen 6 months each decade since 1945. The number of people in New Zealand aged 65 and over is expected to rise by 135% from 385,000 to 892,000 by the year 2031. The number of those aged 85 and over is expected to rise by 282% to over 250,000 by the year 2031.
The number of people aged over 65 will make up nearly 1/5 of New Zealand's population by 2031. Perhaps the most sobering thought is that according to the latest facts and figures coming out of the USA, advances in medical science and improving standards of living means a child born today could live up to age 130. The New Zealand Department of Statistics mortality studies indicate the following life expectancies: | Current Age | Male | Female | | 30 | 72 | 75 | | 40 | 73 | 76 | | 50 | 74 | 77 | | 60 | 76 | 79 | | 70 | 80 | 81 | | 80 | 86 | 87 |
For retirement calculations it is prudent to assume a minimum life expectancy of 85. Interestingly, the older you get the longer your life expectancy is! How much will you need?
Surveys run by the Retirement Commission have shown for a couple in retirement to cover basic living costs they will require an income of around $25,000 (net of tax) per year. This does not include replacement of cars, white ware or holidays. We recommend a couple should aim for a minimum annual income of around $40,000 and to be independent of whether or not they qualify for future entitlement to New Zealand Superannuation. The retirement commissioner recommends if you want your existing lifestyle to continue in retirement, provided all debt has been repaid, you should aim for 70% of your current income. When should you start saving? Calculate how much you will need to save for your retirement
Where we can assist you is creating your Financial Plan. New Zealand Superannuation The current Government policy is 65% of the average weekly wage at age 65. This remains a political football with the major political parties recognising this will be unsustainable by 2040 (or sooner) with the doubling of those aged 65. Type of Annuitant | Weekly payment | Annual income (approx) | | Single (living alone) | $263.90 | $13,722 | | Single (sharing) | $243.60 | $12,667 | | Couple (both qualify) | $406.00 | $21,112 | | Couple (only one partner qualifies) | $387.14 | $20,131 | | Couple (partner not included) | $203.00 | $10,556 |
Source: Ministry of Social Development. Effective 1 April 2006. All taxed at M code, net rates. NOTE: The amounts shown are net of tax. Why do we retire at 65?
The retirement age of 65 is quite arbitrary. Bismark, considered the founder of the German empire and Germany's first Chancellor, introduced it in 1880 at the time he introduced the world's first state pension. He deliberately chose 65 because the average life expectancy of a German at the time was 45! It has already been proposed to the Australian government that the age for qualifying for a state pension be progressively increased to 70 - a view shared by a number of other nations. [ Home ] [ Market Commentary ] [ Investments ] [ Financial Calculators ] [ Financial Planning ] [ Retirement ] [ Insurance ] [ Family Trusts ] [ Business Owners ] [ Keys Creating Wealth ] [ Our Company ] [ OUR GUARANTEE ] [ Our Values ] [ Our Advisers ] [ Contact Us ] [ Questions to Ask ] [ Testimonials ] [ Seminars ] [ Readings ] [ Regular Money Article ] [ Money Articles ] [ CLIENT'S CORNER ] [ Weekly Quotation ] [ FAQ's ] [ Jargon Explained ] [ Site Map ] [ Links ] [ Disclaimer ] financial calculators retirement insurance investments OM-IP family trusts leveraged investments financial planning
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