• Disclosure
  • Privacy Policy
  • DMCA Policy
  • CCPA
  • Medical Disclaimer
  • Contact
  • About
Saturday, August 13, 2022
Bell County News Online
  • Home
  • News
  • Business
  • Technology
    • Crytpocurrency
    • Gaming
    • Gadgets
  • Sports
  • Health
  • General
    • Business Services
  • Travel
  • Press Releases
  • Popular
No Result
View All Result
  • Home
  • News
  • Business
  • Technology
    • Crytpocurrency
    • Gaming
    • Gadgets
  • Sports
  • Health
  • General
    • Business Services
  • Travel
  • Press Releases
  • Popular
No Result
View All Result
No Result
View All Result
Home Health

How Much Will Your Retirement Lifestyle Really Cost? – Stuff.co.nz

by NewsReporter
December 28, 2021
in Health
how-much-will-your-retirement-lifestyle-really-cost?-–-stuffco.nz
Share on FacebookShare on Twitter

No household is quite the same as another and so spending patterns will differ, too.

Micheile Henderdon/Unsplash

No household is quite the same as another and so spending patterns will differ, too.

Retirement is not just about savings and investments. There are other aspects to think about, many of which will affect financial planning for retirement in some way. In part two of our examination of the 2021 Retirement Expenditure Guidelines, Financial Advice New Zealand chief executive Katrina Shanks examines some of those options.

OPINION: Many of the numbers in Massey University’s Fin-Ed Centre’s 2021 New Zealand Retirement Expenditure Guidelines, published in association with Financial Advice NZ and Consilium, threw up some stark, even frightening, facts for pre-retirees to have a hard think about.

They included:

  • The rate at which inflation can add to household expenditure in just one year.

  • The huge shortfall between NZ Super rates and expenditure: $167 per week for one person living in the provinces (No Frills expenditure), and $798 for two people in the city (Choices expenditure).

  • The lump sums needed at retirement to fund spending over and above NZ Super: $170,000 for that one person above, and $809,000 for those two people.

  • Weekly savings required to achieve those lump sums: $185 if starting at age 50, and $47 if starting at 25; and $917 for our couple starting at age 50, and $251 if starting at 25.

But it doesn’t have to be frightening because, as the guidelines say, there are other options to consider that will directly or indirectly affect financial planning for retirement.

Financial matters

The guidelines point out that though they talked about expenditure by currently retired households, no two households are the same, so it’s a good idea to look at your own pre-retirement expenditure and think about how it will change in retirement.

READ MORE:

* Covid life crisis? Don’t make big changes ‘in such an artificial time’, experts say

* What does a healthy money relationship look like?

* Mind the gap: Couples need $809,000 nest egg to retire with ‘choices’ at age 65

That’s what a financial adviser would tell you, and that’s the beginning of your planning.

Assuming you have established your savings habits – perhaps along the lines outlined above as they apply to your situation and requirements in retirement, and preferably as early as possible – your next move is budgeting or tracking your spending, or both.

Doing either budgeting or tracking will allow you to better estimate your likely expenditure in retirement, “and will have the added benefit of possibly identifying current areas of expenditure that could be reduced to assist in achieving your retirement goal”.

This is probably when outside advice can be of most help. There are many ways you can make small changes to your financial behaviour that can have a big impact on your ability to save now.

The guidelines say reviewing life insurance arrangements is an important thing to do upon reaching retirement. For example, if you no longer have dependents and are debt-free, do you still need it? If you decide you still need it, how much cover do you need?

They also suggest reviewing your health insurance. While many elderly people lead very healthy lives, others have health issues that come at a time in their lives when health insurance generally becomes more expensive. Your planning may need to factor in either how you will fund that increasing cost of insurance or whether you don’t want to rely on the public system and can self-insure.

Katrina Shanks.

Supplied

Katrina Shanks.

Living arrangements

The guidelines refer to living arrangements as “a substantial matter” to consider in retirement.

In its 2020 report, Massey’s Fin-Ed Centre looked at the difference between living in your own home and renting. It found renting required weekly savings of $245-$420 per week from age 50 or $80-$135 from age 25 over and above the savings you need to fund the difference between your expenditure and your Super.

These are big numbers and further illustrate the importance of both owning a home and saving early.

This year’s report acknowledges this is only part of the question. It asks if you own your own home, will you continue living in it and for how long. And if you are likely to move closer to family, do you have the funds to buy perhaps in a more expensive area. Or staying where you are and downsizing to free-up capital to generate income.

Other options include moving into a retirement village (where financial arrangements are more complex and vary greatly), or a rest home (if you need residential care, and for which you could be eligible for a government subsidy).

The guidelines make the point that, “Anecdotally, those who choose to downsize or move to other accommodation options, such as rest homes, often leave it later than is ideal.”

They also say it’s important to consider how your partner status may change: if you’re currently partnered, what difference will it make for you if your partner dies? Would your plans to remain in your existing home or to relocate change?

These are all good questions, and as we get older it’s harder to have these conversations so they often get put in the too-hard basket. So, there’s no time like the present to have the chat.

Retirement activities

It’s important to think about what you’re going to do with the time you have once you retire and the costs of that.

The guidelines point out that while the cost of staying home and doing things such as reading and gardening may not be great, buying plants can be. Similarly, though getting involved in community organisations as a volunteer may involve minimal cost, sometimes that cost can be greater than you expect. And most recreational activities have costs, both for equipment and going membership fees.

If travelling is in your plans, do you need to think about funding the purchase of a campervan, or if you have family overseas will you have to factor in that travel?

These are all little extras that can add up into a reasonable expense unless you plan for them early.

Looking at your pre-retirement expenditure to think about how it will change in retirement is vital to how comfortably you will be able to live.

Budgeting is the first and most obvious step, but aspects such as the cost of life and health insurance, living arrangements, and retirement activities should be factored in if you are to cover as many bases as possible so you don’t be surprised.

Once you have this figure as a target then the next step is to work out how to get there. Don’t be one of those people sleepwalking into retirement – plan now and give yourself the peace of mind that you have your retirement covered.

As always, it’s always sensible to seek further advice, preferably from a professional.

In part three: A case study of retirement options for a 25-year-old on a salary of $50,000.

Related Posts

h2f-launches-thunderbolt-performance-center-|-article-|-the-united-states-army-–-united-states-army

H2F Launches Thunderbolt Performance Center | Article | The United States Army – United States Army

by NewsReporter
April 15, 2022
0

1 / 7 Show Caption + Hide Caption – JOINT BASE LEWIS-MCCHORD, Wash., – The Holistic Health and Fitness program launches its post-pilot Thunderbolt Performance Center at the Soldier Center Medical Home in a ribbon cutting ceremony April 13. Col. Thomas D. Murphy Jr., 17th Field Artillery Brigade Commander speaks...

plano-mall-transformation-begins-construction-to-see-new-life-as-hip-mixed-use-destination-–-pr-web

Plano Mall Transformation Begins Construction To See New Life As Hip Mixed-Use Destination – PR Web

by NewsReporter
April 14, 2022
0

Demo has begun on the western half of the old Market Square Mall in Plano to kick start the transformation into Assembly Park Whether you work, dine, exercise, visit or live there, Assembly Park offers something for you. We believe this convergence of activity and green space will appeal to...

healthy-living:-new-drug-providing-hope-for-kids-with-rett-syndrome-–-9-&-10-news-–-9&10-news

Healthy Living: New Drug Providing Hope For Kids With Rett Syndrome – 9 & 10 News – 9&10 News

by NewsReporter
April 13, 2022
0

You watched your child hit all of their milestones: crawling, walking and even babbling their first words. But then, as they continue to grow, they start rapidly losing their coordination, ability to speak and the use of their hands. This is what happens to children with Rett Syndrome. It’s a...

improper-handling-of-seafood-detrimental-to-healthy-diet-–-senior-dietician-–-news-ghana

Improper Handling Of Seafood Detrimental To Healthy Diet – Senior Dietician – News Ghana

by NewsReporter
April 13, 2022
0

Img A Senior Dietician at the University of Ghana, Dr Maxwell Bisala Konlan has urged Ghanaians to adopt proper handling of seafood across the value chain to derive nutritional values from both fishes and shellfishes that significantly contribute to healthy living. Dr Konlan said it is necessary to reduce the...

Bell County News Online

© 2021 Bell County News Online

Navigate Site

  • Disclosure
  • Privacy Policy
  • DMCA Policy
  • CCPA
  • Medical Disclaimer
  • Contact
  • About

Follow Us

No Result
View All Result
  • Home
  • About
  • DMCA Policy
  • Medical Disclaimer
  • Privacy Policy
  • Disclosure
  • CCPA
  • Terms of Use

© 2021 Bell County News Online

We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
Cookie SettingsAccept All
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT