NZ Superannuation - will you have enough to live on?

Friday, 9 October 2009

Congratulations - you are going to live longer!

Stats confirm that 65-year old man can now expect to live until age 81 now, and a 65-year old woman until they are aged 84.

According to the Retirement Commissioner this means that people need to find the money to live on for as many as 20 years after they have finished working.  For most people, this is a large sum of money – a scary amount perhaps.  There is a lot of scare-mongering on “retirement planning” and “superannuation”, and a lot of fairly high pressure selling going on from lots of places.  We think that this is a fairly negative approach to what is really pretty good news – most of us are living longer.  It doesn’t have to be all doom and gloom.

In 2009 if you were to rely only on NZ Superannuation you would get about $311 per week after tax if you lived alone. This equates to an annual amount of $18,950.  Couples who both qualify will receive about $478 per week (combined) after tax.  This equates to an annual amount of $28,450. Most seniors will spend far in excess of this amount, especially between the ages of 65 and 75.

We believe that people can address retirement planning issues in a positive way – by looking at their entire financial planning situation, and then reviewing it regularly. 

For example, will you have to pay rent when you retire?  Or will you have paid for your own home?  It makes a big difference to how much you need to live on.  Do you know how much you need then?

With this in mind we suggest that you take the professional holistic approach – look at everything that influences your financial well-being because it all matters.

  • Can you re-strucuture your mortgage – or shorten it – to save some money?
  • Can you save some money on your house & contents insurance – or get better cover for the same money?
  • Is your health cover right?  Does it cover what you think, for what you pay?
  • Do you have enough – or too much – life and disability insurance?
  • How much money is required once you retire?
  • What do you have to do to get enough?

Our advisers can help with any of these areas. Contact your InsuranceNet insurance broker today.

WINZ has a very good fact sheet regarding retirement - http://www.winz.govt.nz/individuals/65-years-or-older/nz-superannuation.html

This information is general in nature and should not be used as a substitute for financial advice. Always consult your financial adviser before making any financial decisions.