MASTER CLASSnest egg
Nest egg
Retirement Income - what, where, why, and how much?
HOW MUCH INCOME DO you need in retirement? Where will it come from? In my 25 years as an adviser I have seen
some people live on very little and many others who can't. From various sources I have come across over many years, and assuming ownership of a debt free home, I have developed the two following bases;
• • The income you will need to
live very basically The income you will need to
live comfortably A "VERY BASIC" LIVING standard
would not include much fun, no alcohol, no dinners out, and limited travel.
A "COMFORTABLE LIFESTYLE"
would include some travel, dinner out from time to time, owning a decent car and eating better food at home, etc.
• • • • A single person living basically needs
about $22,000 p.a. A single person living comfortably needs
about $35,000 p.a. A couple living basically need about
$33,000 p.a. A couple living comfortably need about
$50,000 p.a. Lifestyle
Single, living alone - Basic Single, living alone - Comfortable Couple – Basic
Couple - Comfortable
Govt super p.a.
$18,143* $18,143* $27,913* $27,913*
Can you rely on government super?
The general consensus is that people over 55 today will get Government Superannuation at 65. People age 45 to 55 today might have to wait until age 66, or 67, 68 or even 70. Those under 45 seem pretty much resigned to the assumption that Government Superannuation may not be there at all, or at least in a much lesser form.
Who stops working at age 65? The actual age you retire will depend on many factors, such as your need for extra cash
flow, your health, whether or not you like your work, the sense of self-worth you get from a productive job or running your own business, interaction with others, and many, many others. Many people over 65 are still working, and indications are that less than 50% need the money – they would rather be working. (From the author - my father lived to be 100, so there are some longevity issues for me to consider too!)
Kiwisaver
Kiwisaver is good for most of us, but it will not be enough unless you've started at a very young age.
"The actual age you retire will depend on many factors, such as your need for extra cash flow, your health, whether or not you like your work, the sense of self-worth you get from a productive job or running your own business, interaction with others, and many, many others."
44 | www.hermagazine.co.nz Need p.a.
$22,000 $35,000 $33,000 $50,000
Shortfall p.a.
$4,000 $17,000 $5,000 $22,000
*As at 1st April 2012 and taxed at the "M" rate – all figures are after tax
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