Often we just gloss over surveys and statistics believing they have no relevance to us. One you might have missed was ANZ’s Retirement Savings Confidence Barometer from late 2013.
The media latched onto “growth investors being more confident of reaching savings goals” but this is a given as over time as growth investments, such as shares and property, tend to outperform income investments such as cash and bonds. What might be of greater significance is the attitudes towards one’s investments and what people think they need for retirement. This survey discovered:
- 33% of respondents with a KiwiSaver account do not know what fund they are invested in.
- 53% of KiwiSaver members had checked the performance of their fund and of these, 61% were confident their savings were on track.Of all those currently saving, planning to save or expecting to have an additional income in retirement, only 50% are confident of reaching their goals.
- 56% of respondents believe they need to have $300 per week ($15,600 pa) after tax as additional income above NZ Super. A further 27% believed they would need an additional $500 per week ($26,000 pa). 5% of all respondents said they intend to live solely on NZ Super in retirement.
Everyone’s lifestyle is different so the amount one needs in retirement will vary. One way to work out what you might require is to define your current after tax income and deduct what expenses will not be relevant at retirement. Then, compare this to the current NZ Superannuation pension rates which are:
- Single living alone: $338.57 net weekly or $17,605.64 net pa
- Married, civil union, de facto, both qualifying: $512.18 total net weekly and $26,633.36 net pa. (Based on ‘S’ tax code, assuming a total annual pre-tax income of between $14,001 and $48,000)
The difference between the applicable NZ Super rate and what you might need is what your investment portfolio needs to achieve. We are happy to help identify if you are on track towards this goal.