Living 30 years after you retire is relatively normal. Money Week recently ran a video about the cost of everyday items over a 30-year span and some of the costs may shock you.
- $4,000 on Eggs
- $17,000 on chocolate
- $4,000 on toilet rolls
- $3,000 on teabags
- $2,800 on toothpaste
- $10,000 on bread
Wow, that’s $40,000 on just some of the essentials. What about the bigger essentials like housing? Here are some situations to consider depending on the type of housing you plan on living in during retirement.
Own your Home
Your expenses will depend on if you own your home and have no mortgage or still are paying off your mortgage during your retirement. The price of your home will also largely be dependent on where in New Zealand your home is. Auckland is the most expensive at NZ$675,000. The expenses you have to calculate for your housing in retirement can only be calculated by knowing your exact situation.
Renting can be an affordable option, more so that you would think. The difference is just $60 per week to rent vs. own your own home. This is mainly due to government subsidies for renters that are pension-aged and the difference between homeowners paying for repairs that renters don’t have to. According to https://www.newzealandnow.govt.nz/living-in-nz/housing/renting-a-property, the median weekly rental payment is NZ$460 for a three to a four-bedroom home.
Retirement living can be positive for many retirees. Retirement villages are filled with like-minded people and have many facilities in close proximity. Facilities from entertainment to dining all at your doorstep. Often these facilities and extras can come at a much higher cost than living in your own home. Many of the financial costs for retirement villages include:
- Purchasing a licence to occupy
- Deferred Management Fee (DMF)
- This helps to go towards the cost of developing the village, grounds, and infrastructure
- Weekly fee
- This is for the daily operations as well as insurance on your home
- Your own content insurance
- Telephone and power bills
- Any additional services like laundry, house cleaning, and meal delivery
Retirement living can be independent or require a certain level of care that usually costs more.
As an example of the cost to live at a rest home that provides 24/7 care http://findaresthome.co.nz/ says that people that are eligible for superannuation will have $34.81 left over per week. If someone is not eligible for the government subsidy, they are regional maximum contributions limit. The example given is Christchurch, where home residents have a maximum of $848.75 per week as of July 1, 2013.
Planning for your retirement is best done when you do it early. Contact your Wright Financial adviser today and we can help ensure that you are set-up with investments, KiwiSaver and even help you invest during your retirement to maximise your money.