Retirement Income Rates – are they increasing?

Have you been retired for a decade or more and wonder if your retirement funds are sufficient? Are you finding your money is buying less or are you able to afford more luxuries? This article looks at retirement income compared to a decade ago. These questions are quite hard to answer in a general way, as everybody’s situation will be different. Retirement income may come from New Zealand Superannuation, invested money or bonds, rental properties, employer retirement schemes and, more recently, the Kiwisaver fund. The last decade has been a turbulent one financially for governments and individuals. Even before the Global Financial Crisis (GFC), which hit the Northern Hemisphere in 2007, you will have heard of people losing their life savings through financial investment institutions going bust. You may have been one of those unlucky people. The floating New Zealand dollar caused prices to increase, and the boom and bust of the housing market also caused financial loss to many, diminishing their retirement income. The consequences of the GFC have slowly but surely crept south and New Zealanders have been feeling the pain of that increasingly. With interest rates so low, any money a retiree has invested will pay out a significantly lower sum. The tragedy of the Christchurch earthquakes has affected the whole of New Zealand financially and, in some way, every New Zealander has felt the fallout from it. Some retirees have found themselves supporting family who were self-supporting pre-earthquake. Other factors need to be taken into account as well, such as GST and petrol prices. These have a very real affect on anybody’s spending power, retired or not. When we look at all these factors as a whole we are tempted to assume that, yes, of course people’s retirement income has fallen in the last few years – how could it not? And even if their income has stayed stable and inflation adjusted, their spending power must surely have weakened. Regardless of income, we all spend on the basics of food, heating and clothes and we all know when we have to tighten our belts, or how much extra to save for a special treat. If you would like more information on the present retirement income, you can talk with My Refund the registered tax agent to find out about retirement fund schemes such as Kiwisaver,.