NZ Government Supperannuation will pay you $10,000 per annum
The NZ superannuation currently pays $470.32 per fortnight pre-tax to married individuals (November 2005). This is $393.56 per fortnight after tax if you have no other income. Expressed on an annual basis it provides $12,228 p.a. pre-tax or $10,232 p.a. after tax. This certainly helps to pay the bills BUT by itself could lead to a rationing of income.

How much do you really need?
Many studies suggest that we can retire comfortably on about 67% of our pre-retirement earnings.

Let us say your salary was $60,000 pre-tax. This is equivalent to $45,330 after tax. 67% of $45,330 is $30,371. This suggests that in retirement, a couple previously earning $60,000 pre-tax p.a. can get by on $30,371p.a. after tax.

A pension provides $20,464 after tax per couple. This couple could require approximately $10,000 ($30,371-$20,464=$9,907) after tax as a supplement. It gets a little tricky forecasting tax and inflation rates, but let’s assume inflation averages 3%p.a. in the future and investments provide 5% after tax p.a. and inflation.

These figures suggest that by the age of 65 years you need to have saved $169,000 if you want to retire comfortably on $30,000 after tax on your final pre-tax salary of $60,000. If you live to 91 or want to live on more than $30,000 p.a. after tax per couple then you need to have saved more.

First Financial will help you calculate your savings and investment requirements. Call us now on 0800 337-577 and find out how.