Photo: RNZ
Younger generations are being warned to be careful basing their planning on guidelines showing what retirees are spending.
Massey University released its latest Retirement Expenditure Guidelines last week, which show what retirees are spending for a no-frills and choices lifestyle in provincial and metropolitan centres.
It estimated households would need to have saved anything up to $500,000 each to fund their retirements beyond what they received in NZ Super, depending on their circumstances and lifestyle.
Rupert Carlyon, founder of KiwiSaver provider Koura, said it seemed low when it came to housing costs.
The report measured spending on housing including money paid in rents, the cost of home ownership, property maintenance, rates and related services and power.
For a provincial one-person household, this cost was $196.59 for a no-frills budget per week, which dropped to $183.54 in a metro centre.
For a choices budget, with more luxuries, it cost a one-person household $234.80 in the provinces and $214.33 in the metro areas.
For a two-person household, it was $241.79 for a metropolitan household with a no-frills budget, and $166.52 for a provincial household.
With a choices budget, it was $270.81 for two people in a metro centre and $343.79 in a provincial centre.
Report author Claire Matthews said it was safe to assume that a substantial proportion of the households covered by the data were mortgage-free homeowners.
Carlyon said that would not necessarily be the case for future retirees.
"Only about 60 percent of people own a house today and that number is expected to fall to 48 percent over the next 20 years. These numbers are all predicated on effectively owning your home with a very small mortgage."
Matthews said it was reasonable to assume that as Gen X and later generations moved into retirement they would spend more on housing than current retirees.
"Whether they will spend more in total is a different question that will be more difficult to judge - it may be they will spend a similar amount but with less discretion because of the proportion going to housing. However, I think we can suggest that if people want to enjoy the same type or style of retirement as current retirees and will not own their own home without debt in retirement they will need to save more to offset the additional housing cost."
Carlyon said it was also important to note that the numbers were based on the assumption households would receive NZ Super, which might be curtailed for future generations.
Dean Anderson, founder of Kernel Wealth, said his research showed that people who were actively saving and investing could build up enough in KiwiSaver and other financial assets to have a comfortable retirement without a home.
"The home ownership pressure not as big as it used to be."
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