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What income do I need in retirement?

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The biggest concern amongst clients who have sought advice from me is whether they have enough money.

The biggest value in getting financial advice from a qualified adviser, is the confidence to know that you do have enough, and more importantly, to know “what is enough?”.

As an adviser, it’s relatively easy for me to play around with some numbers and tell you what income you may be able to sustain through retirement, there are even some great tools online that let you do this (have a look at www.sorted.org). The one thing I can’t tell people, is what income they will need. This is very individual and will depend on the lifestyle you want to lead and what ongoing costs you have.

I have put together a very simple spreadsheet which you can access here and have also put this into a printable pdf format here.

Running through this with retirement in mind (will the mortgage have been repaid? Will insurances have been reduced / cancelled?) will give you a pretty good starting point for what income you will need in retirement. From there, you can add up what income you will have (NZ Super, rental income, pensions / Superannuation) and you can then work out your shortfall if you have one.

The sooner you know your income requirement, the sooner you can make changes to address any shortfalls, and the sooner you can adjust your expectations to what may be a more realistic future.

The table below will give you a good idea of if you’re in the ballpark from a retirement income perspective based on an annual study conducted by Massey University.

If you want advice, or need some help putting it all together, please get in touch. We are here to help and have experience in helping lots of people with this.