Retirement – in theory – is the time in your later years when your working life is over, you get to sit back, relax, put your feet up, spend more time with the grandkids, learn the harp, whatever you like.
But last week a piece of research was released by Massey University. Its headline on Stuff.co.nz may well have sent cold chills through the bones of impending retirees.
“Mind the gap: Couples need $809,000 nest egg to retire with 'choices' at age 65”, it read.
“There’ll be a very small proportion of people who go, ‘that’s not enough’,” says retirement commissioner Jane Wrightson.
“And there’ll be a large proportion of people who go, ‘that’s absolutely impossible’.
“Of course, the main message is: don’t panic."
And Stuff emphasised that in a follow-up piece a couple of days later.
Naturally, there was more to it than that (as a side note, it’s a good rule of thumb to read beyond the headline): the research had analysed retirees’ spending habits, and figured out how much money, over and above that provided by superannuation, would be required to maintain living standards for a 25-year period, from age 65 to age 90.
Your lifestyle and location make a big difference to this: a couple living mortgage-free in a city who are looking to live a ‘choices’ lifestyle – where your basic necessities are taken care of, and you spend a bit extra on luxuries and treats – need $809,000.
But a couple living a very basic ‘no-frills’ lifestyle in the provinces (which is considered to be anywhere that’s not Auckland, Wellington or Christchurch) only need to have $75,000 saved up.
So, there’s a lot of variation, but the research does emphasise the importance of future planning when it comes to retirement.
Today on The Detail, Emile Donovan sits down with Jane Wrightson to discuss the research; what it tells us about future planning when people are living longer, and the importance of not taking your eye off the ball when it comes to thinking about your post-work years.
*In addition to being the Retirement Commissioner, Jane Wrightson is on the RNZ board, and as the former head of NZ On Air, was responsible for commissioning The Detail.