Article originally published on sorted.org.nz
No, this is not some sort of survival challenge – this is real life. Could you get by on $20,000 a year, for the rest of your life? Is that figure doable?
This is the latest figure released by NZ Super – in fact $20,290.40, or $390 a week. This is how much you will receive for your pension, for singles who are living on their own when they retire. If you’re a couple living together you’ll get a princely $31,216 per year (that’s around $600 per week). Doesn’t sound like much, does it?
Compared to the average monthly NZ wage ($3,396.74 according to Numbeo), NZ Super is $1705.87 less to live on – or almost half! If you are like many Kiwis – almost 40% of us – then you will rely solely on NZ Super for funding your retirement. Can you get away with it?
Once you know exactly how much you’ll receive from NZ Super, you might realise that there’s a bit of a gap between what you were hoping your retirement would look like, and what it will actually look like. To see whether you could get by on 20K, why not try out Westpac’s budget calculator?
If you’re still wondering when to retire it’s not too late to start making your own KiwiSaver or other super scheme contributions. Whether you are working for yourself, or working for an employer, you can put away some extra coin to help give you a little boost during retirement. If you are making your own contributions, and you are eligible, your employer is obligated to do the same.
For instance, if you’re currently 55, earning $60,000 per year, and start making contributions of 4% of your income per year, then by the age of 65 you will have added $42,727 to your KiwiSaver account, according to Westpac’s KiwiSaver calculator. This is certainly nothing to sneeze at!
Westpac’s New Zealand Retirement Expenditure Guidelines study from 2015 gives us the hard facts: for a once person household in the metro area, living a no frills lifestyle in retirement will cost around $490/week – and you’ll see that NZ Super’s allocation falls $100 shy of this. For a couple, it comes in at $523/week, so you may be covered with $600 per week, however there won’t be much wiggle room in the budget.
How are you going to live out your retirement? Crunch the numbers to see what’s doable for you.
jean004 - 6 years ago
You Can live on $20,000 pa hundreds of us are doing it, owning your own home and a decent car when you start your retirement is a must. Going for every discount or free offer e.g: some councils give you a free parking sticker if you are over 70. Rate rebates, growing your own veggies, taking free fruit and veggies from community gardens. There are offers out there but it means forgetting your pride, telling all your personal circumstances and endless filling in of forms. Which is why some elderly people end up,isolated and ill,they simply cannot afford to socialize or visit the doctors.