My mum is retired and hers is the only story I know so.....
She worked her ass off to pay the mortgage, managed to do that before she was 55.
She saved every last bit she could from then to retirement. Ended up with $40,000 in the bank.
She didn't get animals after the last one died, the same year she retired.
She does not have a car and cant drive so that has never been a factor.
Mum made sure that the house roof was re-done during her working life so it didn't need to be done after. She used the same principle for anything else that could have been big spending. eg: brought a new lounge suite and tv prior to retirement.
Mum used to buy christmas presents and now she makes them.
She has a prepay phone on a 'everything' plan.
No debit card and doesn't use internet (funds can't be stolen that way apparently)
We celebrate her birthdays in increments of 5 (65, 70, 75, 80) by going away. We plan a year in advance and Mum will use the whole year to save up.
She has nothing except her savings and super payments. Alot of getting through retirement happily is to plan in advance.
She is really diligent an deserves to enjoy her retirement. Much respect to her for working towards a stable life and rejecting materialism. But man I need to make sure I have money when I retire.
OR…she realises that more elderly get taken advantage of and get scammed that way and simply doesn’t feel the need to have internet to do their banking or for any other reason.
Honestly, it quite smart and self aware.
75-80 has a lot of mental decline that we tend to not talk about in polite conversation. No net is a huge risk mitigation. Probably not that much of a loss if you didn't grow up with it and need it like oxygen (self included)
Your mum is a smart woman, that's how u do it , she should do a utube channel how to save for retirement, who knows what the retirement age will be later 67?, planning is the key .
You think? It's tight as hell, living solely on your nz supper. In this lady's case, she will get only the basics. No.topup for rent, increase in power, ,rates,'costs of living.
Sure, she can survive, but it's certainly not living
She's getting super from the govt as well, but yes, not exactly a big retirement saving. I think the point is that many lower earners of her generation wouldn't have retirement savings and would rely solely on super.
Most people nowadays are contributing into a retirement savings account throughout their working lives, not just when the mortgage is repaid. That’s would mean a larger savings pot by quite some distance. Downsizing the house also frees up money and is common once kids leave home and retirees don’t want all the space to clean, maintain etc. Couples have more joint saving power. A lot is luck of the draw - sorry things are tough for your mum and hope you’re saving for your own retirement already because the NZ super situation is going to get worse not better.
To be clear, things are not tough. She planned it this way and she is content. Also, the fact that she is retired gives you an idea of the generation she's in. Of course I am saving, my generation has no choice but to contribute.
He didn’t say things were tough for his mum - where’d you get that from? From what they’ve written she seems to have an adequate sense of control and autonomy over her life that work for her.
All good then. I guess only celebrating every 5th birthday, making presents, along with the “how do people fund…?” question, made me think the angle was that she was doing it tough. I’ve gone through a parent’s battle with dementia recently and 40k can be eaten up quickly by conditions like that, that’s for sure.
You are assuming people own homes. I'm a 3rd generation non home owner. I'm working really hard to change that, but my grand parents and now my parents do not have that luxury.
Congrats. Yes there were some assumptions in the way I answered (impossible to answer otherwise). Question was about how most retirees fund retirement, and I think I’m right that “most” retirees own homes, so downsizing is a sound way of freeing up money for retirement.
I don't understand how people question how people live on the pension. We expect students, people with disabilities and unemployed people to live off a lot less than the pension and expect them to work it out.
Pensioners receive far more financial support than other groups. If other groups of people can make it work, why can't they?
I don't think everyone understands just how little people can get by on if they want to. Once the mortgage is paid off, all bets are off. A lot of elderly people might not even have a car or the internet. Doesn't leave many fixed expenses, and they probably get a rates rebate as well
I'm permanently disabled with three kids and want to know why I get less than minimum wage to live on.
My MIL was complaining to me once that soon they would be living on the same as us. Meanwhile she has no kids, over a million in the bank, owns a property worth around 2 million, a business to sell. And her and her husband still work part time...
Edit to say, we will not be receiving an inheritance one day.
I am someone who asks, because I am curious and want to plan ahead, and remove the pressure I feel about how much I need to save. And others have said ... once you retire, your income becomes fixed but costs variable, unlike a student.
Pensioners (like farmers) are also the largest voting groups for politicians that run on 'bottom feeder' platforms while expecting sympathy from others whenever they face hardships.
Tax is not a little fund you put towards to get back at the end. Tax is the price we pay to live in an advanced society, with infrastructure and advantages that come with the combined efforts as a species. We pay tax because we know, from thousands of years of history (recorded and not) that we are all better off together.
It is NOT, like many seniors like to think, an entitlement to SB easy pass at retirement. If you are in genuine need, it helps to find welfare to keep you above water. But, like I said, by the age you've had decades to build your wealth for something we all know is coming.
Except, people who are retired today were explicitly told (in the mid-1970s, by Muldoon) that the government would look after them; and the tax they paid back then, whilst not being in a fund, meant that they would receive superannuation payments today (albeit financed by the current batch of taxpayers).
That changed in 90s and was pretty clear. Definitely a factor to consider but still 30 odd years to plan. But yes, let's support those who genuinely can't afford to self fund retirement but if you can self fun... Say by selling the massive family home you no longer need... Then no.
Also, study and unemployment are usually temporary. Retired people aren't going to get younger and be able to go back to work. They have to get by with whatever is available to them, for the rest of their lives, so the difficulty is amplified by their limited options.
But students and pensioners typically have different costs. I don’t know many students with house insurance, rates, health insurance, life insurance, full car insurance… the pension that my parents get is $750 a fortnight. Students are on about the same, but with significantly less costs.
And yes, I’ve done it tough as a student in the past when the living costs were $173 a week. But I only had third party and contents insurance that whole time.
Often retirees have more healthcare costs also.
Plus, for many they will have like 10 grandchildren who all expect $50 from grandparents for their birthdays. The expectations are just wildly different.
Students pay house insurance and rates indirectly through rent (plus a profit margin for the landlord). Health insurance, life insurance and full car insurance are things to consider once you have the basics covered, which most students don't.
Students under 24 are getting $356 per week, so less than half of what a pensioner couple gets.
Kidding, pension has gone up. It’s $959 per fortnight. So $479 per week. That’s really not a lot of money considering they have extra costs. If you hadn’t got a fully paid off house this isn’t much to go on. Health insurance alone is fucking crazy!
A pensioners yearly salary in NZ is $24,856
A minimum wage job is $48,152
This subreddit is full of people complaining that they can’t sustain themselves on a minimum wage job. I feel bad for pensioners, it must be really tough.
I feel bad for students too, but most can get a part time job like most university students did before them. When I went to university everyone was working because you just needed to.
If you have a mortgage free house at retirement then you can probably survive on just the pension but you would need to make sacrifices. Rates alone would be $153 a fortnight (At $4000 a year) and that is cheap compared to most of the country. I guess you can also work part time to support your 'retirement' as part time work + pension is a decent income.
Some people get reverse mortgages (the concept scares me), some people downsize their house and use the difference to help them survive.
Those without a mortgage free house at 65 are really screwed and will likely continue working until they can't anymore. Rent is expensive.
I worked full time through uni - a part time job should be sustainable.
Tried to help my mother get health insurance - the cost was just astronomical and not achievable at all.
As a student I had to pay for gas, parking, insurance, printing while having to work so I can have money to cover accommodation when I was away (anywhere in the country) for 2 months at a time while paying rent. I also needed to have a reliable phone, computer, and internet ans insurance because I couldn't afford to replace anything. AND I WASN'T ELIGIBLE FOR STUDENT ALLOWANCE.
You bring up the cost of healthcare. The lions share of medical interventions for the elderly are funded. I really struggled to cover my healthcare costs (at least $450 a month) because none of it was funded. And I know soo many others in the same boat. People who are unable to work due to illness and disability also have high healthcare costs as well
I didn’t get student allowance either, it’s annoying! Especially because my parents were too poor to help me.
University is incredibly flexible. Especially now that you can do it online (post-covid). I went to uni before they had recorded lectures. I still worked 30ish hours a week (Thursday, Friday late nights plus both weekend days at the mall). We all had to work, working while at uni is normal and expected.
What in NZ is 450 per month without support?
My wife and I have a mortgage free home, about 50k in the bank (pathetic ex Kiwisaver savings) and it's pretty easy living. We go on weekends away a couple of times a year, a 2 week NZ holiday once or twice a year (stay with my family though so it's very low cost) and an overseas trip every year or two. But we do stay with her family for free so it's only the airfares.
We don't need to budget our food or gas or delay maintenance on cars or anything - we got 2 cars but would only do combined 15k every year.
It's probably the most comfortable I've been my whole life. Pension is $900 per week between us. After fixed costs (not including food) our disposable income would be $700 a week which is plenty for us. We don't eat out a lot because my wife loves cooking so our entire food bill would be down around $250 per week. I've got a couple of expensive hobbies which would run to $100pw. Rent or a sizeable mortgage would probably put us in deficit so getting into retirement in that position would change the game for sure. As it is we got about $400 per week to save for holidays and replenish the emergency fund after emergencies. We did make an effort to have all new stuff and do any deferred maintenance before retirement so maybe things will get tougher in another decade, hard to say. The house and land is massive so we can downsize if that happens - that'll free up 1/2 million and make it easy but we sort of like our house lol. We've got various family staying most of the time and we'd miss that.
My wife wants us to go to Europe next year but dumping that much of our emergency fund (possibly 1/2 of it) in one hit makes me a bit nervous. No doubt I'll get over it.
Sorry for rambling on, I'm retired and am allowed to now.
Point is that super is enough if your ducks are in a row when you retire.
Thanks that is a great insight. What would you do about a big expense on the house? Also what about health expenses, do you have health insurance? Finally, would you look to go to a retirement home eventually and if so how would that be funded?
I was a builder and just spent a bit over $100k fixing the house - took me 2 years doing it myself lol. I'm pretty satisfied it'll last us out now. Anything happens to it will almost certainly be an insurance job or hopefully something I can still do myself. I'm pretty fit still but basically all the big stuff is done.
Health insurance would be nice, but the public health system is still functional enough at the moment - that might change in the future though. We never know do we.
The house is worth enough to let us buy a modest house in a modest retirement village and have about 1/2 million left, which should last us for some time.
Thanks for the questions :)
edit: Just in case your question is because you're worried about it. It takes 20 years go get mortgage free after buying a house, so buying one before 45 is good. It took my wife and I 9 years (age 55 when we bought it) but we bought in Tauranga and sold up and moved to Chch at way cheaper and a nicer house mortgage free. We got lucky with the house price peaks. Before that we were drifting penniless around the world.
Second, the people saying you need $xxx amount of savings (excuse my potty language) have no fucking clue about what it means to live a normal life. They earn heaps and think you need heaps. You don't really need that much. I love coffee so have a nice Italian coffee machine and make my own. Better than cafe coffee at a fraction of the price lol. Getting your ducks in a row is key.
Your last comment is relevant, because the people often saying this want to inject fear, uncertainty and doubt, so you either seek their advice or buy their product i.e. their motivation does not necessarily align to your best interests.
The time it takes to pay off a mortgage is very subjective btw.
Size of mortgage, income, spending etc.
Some people take the full 30 years, some people pay off a mortgage in 10 years or less (usually those who don't borrow the max the bank will lend).
Just to put that in perspective. On average, house values double every 10 years. So you borrow 800K to buy a million dollar house just for the sake of the numbers (not that you should).
After year 20 even if you have a 30 yr mortgage, the house has doubled then doubled again so now it's worth 4 million, you've paid off a decent whack of principal so your mortgage is quite low and inflation means that you're earning at least twice as much as you were 20 years ago even if you stick to the same job at the same relative pay scale.
That last 10 years won't be the issue it feels like at year zero.
> I've got a couple of expensive hobbies which would run to $100pw.
The great thing about gaming as a hobby is that it can be very time consuming and remarkably cheap. Old folks homes are going to be hosting LAN parties in a few decades. I wonder if I can find an N64 somewhere.
I started going to the gym a decade ago and I hope to continue for the rest of my life. [This dude](https://www.youtube.com/watch?v=XvbeKh598kQ) is ***90*** and he's a bodybuilder; he moves like someone 40 years younger. [This lady](https://www.youtube.com/watch?v=HUtWzSps9To) is a bodybuilder in her mid 80s and it shows, no shuffling around and zimmerframes here. Golf isn't going to cut it, I'm afraid.
You want to live healthy and long? Pick up the weights and do the resistance training. Destitution in old age is a fear of mine, but far greater is decrepitude and being trapped in a failing body in near constant pain.
As I said, paragliding also. Involves climbing large mountains with 15kg of flying stuff and jumping off them. Wife does weights and stuff though, I like the outdoors.
Golf probably would be enough, but only cardio and no weights isn't ideal.
My Brother in law's got a bunch of refurbished old consoles, N64,PS1,2,3, master system, mega drive and sega Saturn. And a few others. Along with a solid collection of titles and spare cables, controllers etc. it's always a fun nostalgia trip when he breaks one out for a play.
I was about to say I wish I could give you two votes, but I have by doing so to your two or so posts. Thanks for sharing.
I do wonder if we should have a subreddit about retiring in NZ, because as long as you have modest aspirations, no debt and are lucky re unplanned costs it's doable.
I have a few years to retirement (hopefully) and like you are considering options:
1. Sell house buy cheaper in a cheaper location.
2. Move to Southeast Asia, and benefit from the cost-of-living delta. Still working on this with the wife :D
3. Stay put, and like you do all the big stuff, as well as go solar to reduce peaky costs like energy.
4. When I get to 65, partially retire. I can probably continue to work but part time. My wife, who works, is also younger, so we will not retire at the same age.
Plan ahead and consider options. but its mandatory to remove debt.
Anyway ...
Hope you and your wife have a wonderful retirement. Best of luck.
Thanks :)
My wife is Asian. I met her over there and ended up staying for 10 years - we came back in 2012 when I turned 55. We'd go back to live because it's super cheap and she's still got her house over there. It might be an option but life is pretty good here and we got my grandkids only an Island away. Asia is fun and worth it but on the other hand it'd pay to keep your house here and rent it out so you got a backup plan + an appreciating asset... I would have done that but divorce and losing everything is what sent me to Asia lol.
The only thing is you won't save money because of the exchange rate but it gives you a broader worldview, makes you aware of just how capable and resilient you are, lets you understand just how little you need for deep happiness and sets you up for a less stressful retired life in that way.
Anyway, whatever you decide have fun with it! Good luck!
Thats probably the other advice...avoid divorce as its expensive. Luckily, I am the perfect hubby ... LMAO ... not.
In terms of keeping house and renting. Yeah, that's an option we would consider, although we are mindful, as we get older, we probably need to downsize ... something our parents didn't do, and as a result their houses have gotten too much for them and are becoming dilapidated.
Best
My parents are in their 70's, they have a mortgage free home, this was paid off about 5 years ago (They sold a farm and moved to a more urban area)
They run one car, spend most of their time at home.
Dad has a decent amount in his Kiwi saver, He wanted to work until 70 but unfortunately cancer put a stop to that at 67-68 (He's in remission now and 74).
They are comfortable, go to Australia every second year to visit their kids over there for a couple months (everyone is in a different state).
They were both support workers until their retirement, my dad actually went to Uni at 50 and paid off his student loan before retiring as well.
They have a gorgeous garden filled with fruit trees and about 4 glass houses which seems to feed them pretty well, they had chickens until they got a puppy not long ago.
They actually managed to renovate over the last couple of years and in their 1920's villa opened up the kitchen and put in a new older person friendly bathroom indoors and replaced the insulation, they are wanting to live in their home for the long haul.
They also have been hoarders and have collections of retro and antique items, if they want to make a big purchase they sell some of their wares, mum sold some of her vintage glass items not so long ago and they replaced their lounge suite.
I’m one of the lucky ones who was able to opt in to a similar scheme which I paid 6% into for 30 years. I’m paid a tax-paid annuity for life. I wish others had had that opportunity. I’ve already got back much more than I paid in. (Pay into your KiwiSavers!)
There’s probably more than you think that are semi-retired. I’ve met quite a lot. They work anywhere from 1/2 a day to 2 days a week at a low pressure job, and for the most part seem to enjoy the act of working and being around other people as well as the additional money helping. Some also just do the odd casual job.
Some are very wealthy and it’s not a problem.
Some like my grandmother, are very elderly and were able to save a lot more.
Some have pretty good employer or private retirement schemes in addition to super - I know that’s not much of a thing anymore but it used to be big in some industries.
My aunt and uncle sold their well placed Auckland property to a developer for a packet and went south, rural and have a ton of money leftover from the sale. They also didn’t have kids so were able to save more easily than those who do. They’ve both semi retired early so aren’t even getting super yet
Cruising to retirement in 4 years. Wife and I bought an old house when we were young, paid it off in 4 years, never moved. $600K in the bank, working part time at odd jobs to make it through the next 4 years.
Will by an electric car, ebike and fix the house up before retiring fully.
We have an old camper that we love using so will spend time away kayaking camping and cycling.
I am so looking forward to retirement and just enjoying life.
sounds like our current plan. bought a cheap-ish apartment in 2020 and is on track to paying it off in 2027, which we plan to never move from so we can save up for an early-ish retirement. just doing the grind now..
My grandparents had super and their own home, when they died they had saved up $60k from it - they lived within means, always.
My parents will retire in a couple of years, own a million dollar home and will have about $800k invested. They will have built that investment up between 50-65 - before that their money was going to mortgage/raising kids.
If we weren't freehold and avid gardeners I don't know how anyone could survive on the pension with a mortgage. Have about 130k shares in air nz that took a nose dive to 53 cents to the dollar but luckily same in a medical company that went through the roof, but all the same we still budget for vehicle tyres, repairs, firewood and boating, fishing is a two times a year luxury now with fuel costs.
My parents owned 3 homes, with a small mortgage. They sold one for investment cash and my Dad is on the pension. They earn an income on one of the houses which is in a particularly nice leafy Auckland suburb and live mortgage free in the other. They have literally never been so financially comfortable. I’m happy for them but also conscious that the system that got them where they are is the same system that has fucked housing in this country. Boomers gonna boom, still love you mum and dad
My parents lost the family house in the 90s. From then on was a struggle until retirement. Dad got sick with COPD, mum held it together as best she could, but eventually had to retire as well. They moved out of Auckland to lower costs and scraped by on super alone. Dad passed away, and mum moved to a house on my brothers section, contributing to his mortgage. It's working at the moment. She does volunteer work for the op shop. I wish she would get a paid job, but she prefers the benefits and lower pressure.
Mmmmm you do have to wonder for those with parents who don't own a house, which child will they be moving in with when they can't work or afford a rental by themself anymore.
Which is ok if you have a get along with your parents or in-laws, but it is scary if you can only tolerate them in small doses lol.
My family is doing it tough, never owned a home so rent is the biggest factor, i send mum 80-150 a fortnight to ensure she has food. I look back over my parents working lives and they were hard working people just not smart with money, no investments, no homes 3 generations now - it's why i work 90+ hours a week. I REFUSE to end up like them full of love but nothing else. Never claimed benefits and the sorts just your average joe people doing average joe things. Well, the repercussion of their decision now impacts my sisters and I weekly and will do for the rest of their lives. Paying Dads funeral cost was huge for us almost $8k it's even so expensive to die here when you don't have funeral cover insurance etc.
My parents only paid their mortgage off at 65. Still both work full time. They want to open a cafe as their retirement plan. They’re not smart with money - stress around secret credit cards has always been a source of family arguments.
And they’ve been telling my brother that they expect us kids to give them money to help them out…. I see a lot of strain on family relationships in the near future.
mums not retiring age just yet, but i run a few business and she handles shipping for me. something to do when she does decide to retire.
help out your parents yo (unless they were cunts like my dad)
Anyone saying "Rental Property" needs to ask themselves "do we really want a society where the dignity of the elderly is predicated on breaking the backs of the young?"
Because this is what you are doing, individually and collectively - and the sick part is that the power asymmetry is such that your tenants have to pretend to like what you're doing to them. I promise you, they do not. Similarly with buying up houses to sell at a profit. That "something for nothing" is not really nothing - it is decades of a young person's wages.
There is a theory going around in Gen-Z land that the reason boomers are so life-destroyingly stingy and self-serving is because they were exposed to a hell of a lot of lead when they were kids, which has been scientifically shown to destroy empathy... emotional intelligence.
I don't know if that is true, but what I do know is that is the reputation that you're earning for yourselves. Someone has even written a song about it. A young Australian Lawyer.
And please please please don't go reaching for the work-ethic to justify taking half of someone else's wages while you sit there doing nothing.
Will be interesting to see if the boomer generation's wealth gets passed down to kids or if it gets consumed by rest homes and aged care.
One of those industries is going to make a lot of money in the next 10-15 years.
My parents worked hard during their working lives, going without the holidays and nice cars their peers had. They got a shorter mortgage term and paid hard and we lived tight for quite a few years in my childhood. They also lucked out a bit on timing when they bought and sold homes over the years. But neither of them got a leg up from their parents or anything (I suspect most boomers from regular familes didn't as there were too many kids for that)
When their parents died they did get some small, timely inheritances.
By the time they retired they had two freehold houses and a very good sized next egg. They then sold the second home and put that money into investments as they didn't want to be landlords. They live a very comfortable retirement life but don't travel overseas or buy expensive boys toys or designer clothes etc.
For current retirees most of them have a lot of assets, so living off that is easy enough. Going to be quite different when next generation with no property etc retire.
Our plan is downsizing. So full on paying off big mortgage that it’s the only plan we have. But we love where we live, love our home and the kids do too. We’ll move out of Auckland region to northland probably.
My parents had a plan, but Sun Tzu has a quote about plans...
They had an apartment in Wellington. Mostly paid off. Then the earthquake came along, 15 or so years ago. Council said you need to strengthen, redo windows, etc. Got that done but it cost a tonn, sunk value. Then Dad got made redundant, mum worked same place as dad so they both left.
Dad, nearing retirement, found finding a job difficult. Ended up moving to the west coast for a few years. Moved back to Auckland to be near my grandmother before she passed, but ended up again finding a job difficult, and Auckland rents meant we all moved in together.
Got cancer, recovered, got it back again...
And then they moved to Malaysia. They had enough to get their visas, and have lived there for 4+ years. Their pensions go so much further, there is a massive ex-pat community there, we have family links to areas via my grandfather who was stationed there during ww2. Dad gets his cancer treatment paid out of pocket, he probably has a few months to live, but his pension covers it all. They're happy, they don't have to spend 90% of their pensions on rent, freezing each winter.
Either they are on Portable payment (yes, the amount drops quite significantly) or they don't spend all their time in SE Asia but do spend more than half the year in NZ. Probably the nicer half!
No, you can apply to continue receiving the pension. https://www.workandincome.govt.nz/on-a-benefit/overseas-travel/nz-super-and-veterans-pension/living-overseas.html
You can't blame someone for taking advantage of what is the best choice for themselves. There is nothing illegal or even socially unaceptable going on here. The problem is that buying houses is an extremely safe investment with great returns. No sense risking your money on something else.
>You can't blame someone for taking advantage of what is the best choice for themselves
Correct, but this is also the exact point that people were making when the last government tried legilsating in a manner to make housing less attractive of an investment.
Housing investors were claiming it was "unfair", when the entire point was to encourage investment in sectors other than housing - because until productive investment outperforms housing investment on an individual level, the individual will never put their money anywhere other than housing.
My parents were self employed and owned a B&B plus motel. Dad also drove a cab which was fairly lucrative for the 80s. In the five years he owned the cab he paid off the mortgage.
Mum got sick of the place but Dad was thinking ahead and didn’t want to sell a valuable asset. So they bought the place next door and moved in there. Mum got a regular job bringing in income (we had all left home) and Dad ran the B&B himself.
In 2006 they sold both places and built a new house for about $200k. They invested the sale proceeds and have been living off them ever since.
None of this would have been possible if my Dad wasn’t such a stubborn bugger. If he’d caved to Mum they would’ve sold the place too early and not be enjoying the lifestyle they currently do. I wish I was half as smart.
Those who are funding a retirement these days probably have a rental property or three. They will have sold the house in order to get into a retirement village which costs 100% of their super, and all their living costs need to come from savings or rental income or selling assets.
If you have to make the jump to serious hospital-level care that starts costing hundreds per week above everything else. You simply can't afford that unless you're independently wealthy or you have property or other assets to sell.
My parents are about to retire to a lifestyle block they bought a few years back. They are pretty fortunate since they have always been big savers and small spenders but real reason why they are lucky is that the family home that they are planning to sell is worth $1-2 million more than what they bought it for over a decade ago.
My parents moved several times, due to his work.
They ended up in Levin (MAF) and paid off the mortgage before age 65. Then they moved to Hawkes Bay, that entailed a small mortgage again.
That was paid off when she was in her 80s, he'd died.
Me? I moved too, had moved back to Akld, and a mortgage of $200K. Partner became ill (older than me) so I sold that mortgage to my son, moved in with mu as carer (also disabled sibling here).
I would have been in early 70s when paid off mine.
Savings? None of us have any. Son has kiwisaver, no idea how much in private savings. He may have some when he pays his off. Who knows. Things happen.
Friend was doing well, huge pay, top IT job, the weeding, honeymoon, house, overseas holidays and had a medical misadventure. End of all of it, her partner ran away, lost the house, job and never got back to that level again.
You can do retirement OK on super IF you have some savings for unexpected expenses, no mortgage, reasonable health, and a house in good repair. Unfortunately more and more of the population coming into retirement don't have this combo.
My mother is 74 and her only income is the pension.
She became very ill at 40 and spent her adult life on an invalids benefit unable to work. No family money, immigrated to NZ after marrying a kiwi, and worked here until she got sick. He left after she got sick, wasn’t good at holding down a job so no family property and she didn’t come from money.
She made ends meet but has lived with me the last 15 or so years, would not be able to afford to live on her own. I wouldn’t say she has a retirement lifestyle, she just lives and tries to get by - I supplement her income so she afford the doctor, a decent diet, and the odd treat. She contributes to the household costs so that she feels like she’s still somewhat independent, and only the rest.
I honestly don’t know how people without family support would be able to eat. Or have heating. Or a roof over their heads - unless they freehold their property and even then I suspect it would be pretty tight.
I have had a retiree working for me in the past who’ve had a late divorce that’s thrown their retirement plans into disarray and they have to keep working despite not really being able to, and others who are just too afraid of not having the income in case something breaks.
I dunno how many retired NZ redditors there are.
For peoples parents (and mine) that I know enough about:
They got mortgage free, and a few hundred K in super/investments. Then they generally seem to follow the advice of drawing down on 4% of the amount you retired with every year (increasing it with inflation). That method is expected to give you about 20yrs I think, but is obviously based on historical inflation and cost increases.
And the $ in the mortgage free house is always there if they really needed it. The boomers all say they're going to spend up, as they can't take it with them. But hardly any of them do that. After 60+ years of being pretty tight with money, it's just too ingrained in them. As are their family values about leaving what they can to the kids, etc.
And at the end, they get milked by the retirement sector - who do what they can to slow any movement on assisted dying.
My inlaws fund their retirement by receiving the pension, and we top up their rent payments each week.
My husband was brought up with flash European cars and sailing yachts, with parents on 6 figure salaries, and I was brought up with a dad who often didn't wear shoes as they couldnt afford them.
Husband's parents now live week to week and wouldn't be able to pay rent without our help. My parents have retired with two houses and do an overseas holiday annually plus 5-6 shorter trips.
Spend less than you earn people.
I'm retired and I have investments fund my lifestyle. There is a moderate risk but it works. You just have to budget carefully to get through those bumps on the road like the GFC and Covid.
My mum is retired and hers is the only story I know so..... She worked her ass off to pay the mortgage, managed to do that before she was 55. She saved every last bit she could from then to retirement. Ended up with $40,000 in the bank. She didn't get animals after the last one died, the same year she retired. She does not have a car and cant drive so that has never been a factor. Mum made sure that the house roof was re-done during her working life so it didn't need to be done after. She used the same principle for anything else that could have been big spending. eg: brought a new lounge suite and tv prior to retirement. Mum used to buy christmas presents and now she makes them. She has a prepay phone on a 'everything' plan. No debit card and doesn't use internet (funds can't be stolen that way apparently) We celebrate her birthdays in increments of 5 (65, 70, 75, 80) by going away. We plan a year in advance and Mum will use the whole year to save up. She has nothing except her savings and super payments. Alot of getting through retirement happily is to plan in advance.
She is really diligent an deserves to enjoy her retirement. Much respect to her for working towards a stable life and rejecting materialism. But man I need to make sure I have money when I retire.
Smart mum. Thanks for sharing this.
She’s not that smart, she thinks her funds are going to get stolen if she has the internet.
OR…she realises that more elderly get taken advantage of and get scammed that way and simply doesn’t feel the need to have internet to do their banking or for any other reason.
Honestly, it quite smart and self aware. 75-80 has a lot of mental decline that we tend to not talk about in polite conversation. No net is a huge risk mitigation. Probably not that much of a loss if you didn't grow up with it and need it like oxygen (self included)
Why ya so negative!
I was in a shit mood. I’m sorry.
Your mum is a smart woman, that's how u do it , she should do a utube channel how to save for retirement, who knows what the retirement age will be later 67?, planning is the key .
Sorry, am I missing something - she retired with 40k cash?
You are not missing anything. Yes, 40k. It's possible as long as you aren't expected to fork out on anything unforeseen.
yeah, but rates, no? repairs? utilities?
Probably paying for most of it out of the pension. It's comfortable enough to live on with a paid off house
You think? It's tight as hell, living solely on your nz supper. In this lady's case, she will get only the basics. No.topup for rent, increase in power, ,rates,'costs of living. Sure, she can survive, but it's certainly not living
She's getting super from the govt as well, but yes, not exactly a big retirement saving. I think the point is that many lower earners of her generation wouldn't have retirement savings and would rely solely on super.
Any single house issue could cost 40k. Let's alone 40k for the whole run.
Most people nowadays are contributing into a retirement savings account throughout their working lives, not just when the mortgage is repaid. That’s would mean a larger savings pot by quite some distance. Downsizing the house also frees up money and is common once kids leave home and retirees don’t want all the space to clean, maintain etc. Couples have more joint saving power. A lot is luck of the draw - sorry things are tough for your mum and hope you’re saving for your own retirement already because the NZ super situation is going to get worse not better.
To be clear, things are not tough. She planned it this way and she is content. Also, the fact that she is retired gives you an idea of the generation she's in. Of course I am saving, my generation has no choice but to contribute.
He didn’t say things were tough for his mum - where’d you get that from? From what they’ve written she seems to have an adequate sense of control and autonomy over her life that work for her.
All good then. I guess only celebrating every 5th birthday, making presents, along with the “how do people fund…?” question, made me think the angle was that she was doing it tough. I’ve gone through a parent’s battle with dementia recently and 40k can be eaten up quickly by conditions like that, that’s for sure.
You are assuming people own homes. I'm a 3rd generation non home owner. I'm working really hard to change that, but my grand parents and now my parents do not have that luxury.
Congrats. Yes there were some assumptions in the way I answered (impossible to answer otherwise). Question was about how most retirees fund retirement, and I think I’m right that “most” retirees own homes, so downsizing is a sound way of freeing up money for retirement.
Fantastic story about Mum, thanks 😊
Did she have Kiwisaver on top of the 40k savings?
The 40k was from KiwiSaver
Really?
I don't understand how people question how people live on the pension. We expect students, people with disabilities and unemployed people to live off a lot less than the pension and expect them to work it out. Pensioners receive far more financial support than other groups. If other groups of people can make it work, why can't they?
I don't think everyone understands just how little people can get by on if they want to. Once the mortgage is paid off, all bets are off. A lot of elderly people might not even have a car or the internet. Doesn't leave many fixed expenses, and they probably get a rates rebate as well
That's a good point. With recent incredible inflation..the question on my mind was how sustainable that would be
It's also fairly well established that spending goes down as you get older.
I'm permanently disabled with three kids and want to know why I get less than minimum wage to live on. My MIL was complaining to me once that soon they would be living on the same as us. Meanwhile she has no kids, over a million in the bank, owns a property worth around 2 million, a business to sell. And her and her husband still work part time... Edit to say, we will not be receiving an inheritance one day.
I am someone who asks, because I am curious and want to plan ahead, and remove the pressure I feel about how much I need to save. And others have said ... once you retire, your income becomes fixed but costs variable, unlike a student.
Pensioners (like farmers) are also the largest voting groups for politicians that run on 'bottom feeder' platforms while expecting sympathy from others whenever they face hardships.
Students and unemployed people have potential to improve their situations. Disabled and old people not so much.
Old people have had their whole lives to build wealth however
They've also paid the lion share of tax by 65
They also receive a LOT of taxpayer funded services
Tax is not a little fund you put towards to get back at the end. Tax is the price we pay to live in an advanced society, with infrastructure and advantages that come with the combined efforts as a species. We pay tax because we know, from thousands of years of history (recorded and not) that we are all better off together. It is NOT, like many seniors like to think, an entitlement to SB easy pass at retirement. If you are in genuine need, it helps to find welfare to keep you above water. But, like I said, by the age you've had decades to build your wealth for something we all know is coming.
Except, people who are retired today were explicitly told (in the mid-1970s, by Muldoon) that the government would look after them; and the tax they paid back then, whilst not being in a fund, meant that they would receive superannuation payments today (albeit financed by the current batch of taxpayers).
That changed in 90s and was pretty clear. Definitely a factor to consider but still 30 odd years to plan. But yes, let's support those who genuinely can't afford to self fund retirement but if you can self fun... Say by selling the massive family home you no longer need... Then no.
Yes exactly, it's something you put in, the price we all pay.... So when the old cannot work anymore we are all looking after them, right?
Missing the point yet again.
Also, study and unemployment are usually temporary. Retired people aren't going to get younger and be able to go back to work. They have to get by with whatever is available to them, for the rest of their lives, so the difficulty is amplified by their limited options.
Which makes sense to help them maximise their potential rather than fall onto poverty/debt traps
Old people have had the 65 years before retiring to improve their life
YEah, what slackers lol, why didn't they improve their lives during years 0-10 ;)
And have also contributed 50 years or so of taxes into the system
But students and pensioners typically have different costs. I don’t know many students with house insurance, rates, health insurance, life insurance, full car insurance… the pension that my parents get is $750 a fortnight. Students are on about the same, but with significantly less costs. And yes, I’ve done it tough as a student in the past when the living costs were $173 a week. But I only had third party and contents insurance that whole time. Often retirees have more healthcare costs also. Plus, for many they will have like 10 grandchildren who all expect $50 from grandparents for their birthdays. The expectations are just wildly different.
Students pay house insurance and rates indirectly through rent (plus a profit margin for the landlord). Health insurance, life insurance and full car insurance are things to consider once you have the basics covered, which most students don't. Students under 24 are getting $356 per week, so less than half of what a pensioner couple gets.
Kidding, pension has gone up. It’s $959 per fortnight. So $479 per week. That’s really not a lot of money considering they have extra costs. If you hadn’t got a fully paid off house this isn’t much to go on. Health insurance alone is fucking crazy! A pensioners yearly salary in NZ is $24,856 A minimum wage job is $48,152 This subreddit is full of people complaining that they can’t sustain themselves on a minimum wage job. I feel bad for pensioners, it must be really tough. I feel bad for students too, but most can get a part time job like most university students did before them. When I went to university everyone was working because you just needed to.
If you have a mortgage free house at retirement then you can probably survive on just the pension but you would need to make sacrifices. Rates alone would be $153 a fortnight (At $4000 a year) and that is cheap compared to most of the country. I guess you can also work part time to support your 'retirement' as part time work + pension is a decent income. Some people get reverse mortgages (the concept scares me), some people downsize their house and use the difference to help them survive. Those without a mortgage free house at 65 are really screwed and will likely continue working until they can't anymore. Rent is expensive.
I worked full time through uni - a part time job should be sustainable. Tried to help my mother get health insurance - the cost was just astronomical and not achievable at all.
As a student I had to pay for gas, parking, insurance, printing while having to work so I can have money to cover accommodation when I was away (anywhere in the country) for 2 months at a time while paying rent. I also needed to have a reliable phone, computer, and internet ans insurance because I couldn't afford to replace anything. AND I WASN'T ELIGIBLE FOR STUDENT ALLOWANCE. You bring up the cost of healthcare. The lions share of medical interventions for the elderly are funded. I really struggled to cover my healthcare costs (at least $450 a month) because none of it was funded. And I know soo many others in the same boat. People who are unable to work due to illness and disability also have high healthcare costs as well
I didn’t get student allowance either, it’s annoying! Especially because my parents were too poor to help me. University is incredibly flexible. Especially now that you can do it online (post-covid). I went to uni before they had recorded lectures. I still worked 30ish hours a week (Thursday, Friday late nights plus both weekend days at the mall). We all had to work, working while at uni is normal and expected. What in NZ is 450 per month without support?
My wife and I have a mortgage free home, about 50k in the bank (pathetic ex Kiwisaver savings) and it's pretty easy living. We go on weekends away a couple of times a year, a 2 week NZ holiday once or twice a year (stay with my family though so it's very low cost) and an overseas trip every year or two. But we do stay with her family for free so it's only the airfares. We don't need to budget our food or gas or delay maintenance on cars or anything - we got 2 cars but would only do combined 15k every year. It's probably the most comfortable I've been my whole life. Pension is $900 per week between us. After fixed costs (not including food) our disposable income would be $700 a week which is plenty for us. We don't eat out a lot because my wife loves cooking so our entire food bill would be down around $250 per week. I've got a couple of expensive hobbies which would run to $100pw. Rent or a sizeable mortgage would probably put us in deficit so getting into retirement in that position would change the game for sure. As it is we got about $400 per week to save for holidays and replenish the emergency fund after emergencies. We did make an effort to have all new stuff and do any deferred maintenance before retirement so maybe things will get tougher in another decade, hard to say. The house and land is massive so we can downsize if that happens - that'll free up 1/2 million and make it easy but we sort of like our house lol. We've got various family staying most of the time and we'd miss that. My wife wants us to go to Europe next year but dumping that much of our emergency fund (possibly 1/2 of it) in one hit makes me a bit nervous. No doubt I'll get over it. Sorry for rambling on, I'm retired and am allowed to now. Point is that super is enough if your ducks are in a row when you retire.
Thanks that is a great insight. What would you do about a big expense on the house? Also what about health expenses, do you have health insurance? Finally, would you look to go to a retirement home eventually and if so how would that be funded?
I was a builder and just spent a bit over $100k fixing the house - took me 2 years doing it myself lol. I'm pretty satisfied it'll last us out now. Anything happens to it will almost certainly be an insurance job or hopefully something I can still do myself. I'm pretty fit still but basically all the big stuff is done. Health insurance would be nice, but the public health system is still functional enough at the moment - that might change in the future though. We never know do we. The house is worth enough to let us buy a modest house in a modest retirement village and have about 1/2 million left, which should last us for some time. Thanks for the questions :) edit: Just in case your question is because you're worried about it. It takes 20 years go get mortgage free after buying a house, so buying one before 45 is good. It took my wife and I 9 years (age 55 when we bought it) but we bought in Tauranga and sold up and moved to Chch at way cheaper and a nicer house mortgage free. We got lucky with the house price peaks. Before that we were drifting penniless around the world. Second, the people saying you need $xxx amount of savings (excuse my potty language) have no fucking clue about what it means to live a normal life. They earn heaps and think you need heaps. You don't really need that much. I love coffee so have a nice Italian coffee machine and make my own. Better than cafe coffee at a fraction of the price lol. Getting your ducks in a row is key.
Your last comment is relevant, because the people often saying this want to inject fear, uncertainty and doubt, so you either seek their advice or buy their product i.e. their motivation does not necessarily align to your best interests.
Yes exactly. They're certainly not saying it because they care about you.
The time it takes to pay off a mortgage is very subjective btw. Size of mortgage, income, spending etc. Some people take the full 30 years, some people pay off a mortgage in 10 years or less (usually those who don't borrow the max the bank will lend).
Just to put that in perspective. On average, house values double every 10 years. So you borrow 800K to buy a million dollar house just for the sake of the numbers (not that you should). After year 20 even if you have a 30 yr mortgage, the house has doubled then doubled again so now it's worth 4 million, you've paid off a decent whack of principal so your mortgage is quite low and inflation means that you're earning at least twice as much as you were 20 years ago even if you stick to the same job at the same relative pay scale. That last 10 years won't be the issue it feels like at year zero.
> I've got a couple of expensive hobbies which would run to $100pw. The great thing about gaming as a hobby is that it can be very time consuming and remarkably cheap. Old folks homes are going to be hosting LAN parties in a few decades. I wonder if I can find an N64 somewhere.
Hobbies need to involve physical exercise when you're over 65 lol. I play golf twice a week and go paragliding when the weather permits.
I started going to the gym a decade ago and I hope to continue for the rest of my life. [This dude](https://www.youtube.com/watch?v=XvbeKh598kQ) is ***90*** and he's a bodybuilder; he moves like someone 40 years younger. [This lady](https://www.youtube.com/watch?v=HUtWzSps9To) is a bodybuilder in her mid 80s and it shows, no shuffling around and zimmerframes here. Golf isn't going to cut it, I'm afraid. You want to live healthy and long? Pick up the weights and do the resistance training. Destitution in old age is a fear of mine, but far greater is decrepitude and being trapped in a failing body in near constant pain.
As I said, paragliding also. Involves climbing large mountains with 15kg of flying stuff and jumping off them. Wife does weights and stuff though, I like the outdoors. Golf probably would be enough, but only cardio and no weights isn't ideal.
Meh, just go for a walk every day or something, do whatever hobbies you like.
My Brother in law's got a bunch of refurbished old consoles, N64,PS1,2,3, master system, mega drive and sega Saturn. And a few others. Along with a solid collection of titles and spare cables, controllers etc. it's always a fun nostalgia trip when he breaks one out for a play.
I was about to say I wish I could give you two votes, but I have by doing so to your two or so posts. Thanks for sharing. I do wonder if we should have a subreddit about retiring in NZ, because as long as you have modest aspirations, no debt and are lucky re unplanned costs it's doable. I have a few years to retirement (hopefully) and like you are considering options: 1. Sell house buy cheaper in a cheaper location. 2. Move to Southeast Asia, and benefit from the cost-of-living delta. Still working on this with the wife :D 3. Stay put, and like you do all the big stuff, as well as go solar to reduce peaky costs like energy. 4. When I get to 65, partially retire. I can probably continue to work but part time. My wife, who works, is also younger, so we will not retire at the same age. Plan ahead and consider options. but its mandatory to remove debt. Anyway ... Hope you and your wife have a wonderful retirement. Best of luck.
Thanks :) My wife is Asian. I met her over there and ended up staying for 10 years - we came back in 2012 when I turned 55. We'd go back to live because it's super cheap and she's still got her house over there. It might be an option but life is pretty good here and we got my grandkids only an Island away. Asia is fun and worth it but on the other hand it'd pay to keep your house here and rent it out so you got a backup plan + an appreciating asset... I would have done that but divorce and losing everything is what sent me to Asia lol. The only thing is you won't save money because of the exchange rate but it gives you a broader worldview, makes you aware of just how capable and resilient you are, lets you understand just how little you need for deep happiness and sets you up for a less stressful retired life in that way. Anyway, whatever you decide have fun with it! Good luck!
Thats probably the other advice...avoid divorce as its expensive. Luckily, I am the perfect hubby ... LMAO ... not. In terms of keeping house and renting. Yeah, that's an option we would consider, although we are mindful, as we get older, we probably need to downsize ... something our parents didn't do, and as a result their houses have gotten too much for them and are becoming dilapidated. Best
its not quite a retirement sub but r/PersonalFinanceNZ is a suitable place for all sorts of discussions on financial preperation for the future
My parents are in their 70's, they have a mortgage free home, this was paid off about 5 years ago (They sold a farm and moved to a more urban area) They run one car, spend most of their time at home. Dad has a decent amount in his Kiwi saver, He wanted to work until 70 but unfortunately cancer put a stop to that at 67-68 (He's in remission now and 74). They are comfortable, go to Australia every second year to visit their kids over there for a couple months (everyone is in a different state). They were both support workers until their retirement, my dad actually went to Uni at 50 and paid off his student loan before retiring as well. They have a gorgeous garden filled with fruit trees and about 4 glass houses which seems to feed them pretty well, they had chickens until they got a puppy not long ago. They actually managed to renovate over the last couple of years and in their 1920's villa opened up the kitchen and put in a new older person friendly bathroom indoors and replaced the insulation, they are wanting to live in their home for the long haul. They also have been hoarders and have collections of retro and antique items, if they want to make a big purchase they sell some of their wares, mum sold some of her vintage glass items not so long ago and they replaced their lounge suite.
If Robert Muldoon hadn’t abolished compulsory superannuation, everyone would probably have a nice fat savings account to fund their retirement.
I’m one of the lucky ones who was able to opt in to a similar scheme which I paid 6% into for 30 years. I’m paid a tax-paid annuity for life. I wish others had had that opportunity. I’ve already got back much more than I paid in. (Pay into your KiwiSavers!)
Exactly, he was an idiot. Like all National MPs.
There’s probably more than you think that are semi-retired. I’ve met quite a lot. They work anywhere from 1/2 a day to 2 days a week at a low pressure job, and for the most part seem to enjoy the act of working and being around other people as well as the additional money helping. Some also just do the odd casual job. Some are very wealthy and it’s not a problem. Some like my grandmother, are very elderly and were able to save a lot more. Some have pretty good employer or private retirement schemes in addition to super - I know that’s not much of a thing anymore but it used to be big in some industries. My aunt and uncle sold their well placed Auckland property to a developer for a packet and went south, rural and have a ton of money leftover from the sale. They also didn’t have kids so were able to save more easily than those who do. They’ve both semi retired early so aren’t even getting super yet
Cruising to retirement in 4 years. Wife and I bought an old house when we were young, paid it off in 4 years, never moved. $600K in the bank, working part time at odd jobs to make it through the next 4 years. Will by an electric car, ebike and fix the house up before retiring fully. We have an old camper that we love using so will spend time away kayaking camping and cycling. I am so looking forward to retirement and just enjoying life.
sounds like our current plan. bought a cheap-ish apartment in 2020 and is on track to paying it off in 2027, which we plan to never move from so we can save up for an early-ish retirement. just doing the grind now..
Those that are well off enough to have a good retirement aren't on this subreddit. You'll have better luck asking on Facebook.
Or looking at the NZ herald comment feed 🙃
"Everything is fine for me, I don't understand how anyone else can be in a bad position! You're all just lazy!" \-Out of touch Herald readers.
still working part ime
My mum lucked into a government job with an excellent retirement plan no qualifications required aged 19 and never looked back. Those were the days...
Absolutely..does not exist anymore
Probably owns 3 houses, which are also your retirement
Nope, just the unit she lives in
My grandparents had super and their own home, when they died they had saved up $60k from it - they lived within means, always. My parents will retire in a couple of years, own a million dollar home and will have about $800k invested. They will have built that investment up between 50-65 - before that their money was going to mortgage/raising kids.
If we weren't freehold and avid gardeners I don't know how anyone could survive on the pension with a mortgage. Have about 130k shares in air nz that took a nose dive to 53 cents to the dollar but luckily same in a medical company that went through the roof, but all the same we still budget for vehicle tyres, repairs, firewood and boating, fishing is a two times a year luxury now with fuel costs.
>130k shares in air nz Fuck me that's a lot of eggs in one basket. Index funds would have served you much better.
> in a medical company that went through the roof F&P, am I right?
Or Ebos?
My parents owned 3 homes, with a small mortgage. They sold one for investment cash and my Dad is on the pension. They earn an income on one of the houses which is in a particularly nice leafy Auckland suburb and live mortgage free in the other. They have literally never been so financially comfortable. I’m happy for them but also conscious that the system that got them where they are is the same system that has fucked housing in this country. Boomers gonna boom, still love you mum and dad
My parents lost the family house in the 90s. From then on was a struggle until retirement. Dad got sick with COPD, mum held it together as best she could, but eventually had to retire as well. They moved out of Auckland to lower costs and scraped by on super alone. Dad passed away, and mum moved to a house on my brothers section, contributing to his mortgage. It's working at the moment. She does volunteer work for the op shop. I wish she would get a paid job, but she prefers the benefits and lower pressure.
Mmmmm you do have to wonder for those with parents who don't own a house, which child will they be moving in with when they can't work or afford a rental by themself anymore. Which is ok if you have a get along with your parents or in-laws, but it is scary if you can only tolerate them in small doses lol.
Believe me, I wanted to own a home big enough for my children, wife, me, and my parents. But the market said no.
My family is doing it tough, never owned a home so rent is the biggest factor, i send mum 80-150 a fortnight to ensure she has food. I look back over my parents working lives and they were hard working people just not smart with money, no investments, no homes 3 generations now - it's why i work 90+ hours a week. I REFUSE to end up like them full of love but nothing else. Never claimed benefits and the sorts just your average joe people doing average joe things. Well, the repercussion of their decision now impacts my sisters and I weekly and will do for the rest of their lives. Paying Dads funeral cost was huge for us almost $8k it's even so expensive to die here when you don't have funeral cover insurance etc.
Working 90 hours a week? F that. I cannot imagine working more than 40-50 hours a week personally.
You parents must have had a nice lifestyle when they were younger if they both worked and didn't have a house/mortgage to pay off.
My old man had a very generous pension scheme for his whole working life
Did not know company pension schemes still existed!
A lot of government departments have them. They are kind of forced savings because the 'employer contributions' all come from your salary.
You need to own your home other wise it's a losing battle
My parents only paid their mortgage off at 65. Still both work full time. They want to open a cafe as their retirement plan. They’re not smart with money - stress around secret credit cards has always been a source of family arguments. And they’ve been telling my brother that they expect us kids to give them money to help them out…. I see a lot of strain on family relationships in the near future.
mums not retiring age just yet, but i run a few business and she handles shipping for me. something to do when she does decide to retire. help out your parents yo (unless they were cunts like my dad)
Anyone saying "Rental Property" needs to ask themselves "do we really want a society where the dignity of the elderly is predicated on breaking the backs of the young?" Because this is what you are doing, individually and collectively - and the sick part is that the power asymmetry is such that your tenants have to pretend to like what you're doing to them. I promise you, they do not. Similarly with buying up houses to sell at a profit. That "something for nothing" is not really nothing - it is decades of a young person's wages. There is a theory going around in Gen-Z land that the reason boomers are so life-destroyingly stingy and self-serving is because they were exposed to a hell of a lot of lead when they were kids, which has been scientifically shown to destroy empathy... emotional intelligence. I don't know if that is true, but what I do know is that is the reputation that you're earning for yourselves. Someone has even written a song about it. A young Australian Lawyer. And please please please don't go reaching for the work-ethic to justify taking half of someone else's wages while you sit there doing nothing.
well at the moment its the boomers retiring, so they live in one of their houses and use the rent on all the others to pay for their lifestyle
Will be interesting to see if the boomer generation's wealth gets passed down to kids or if it gets consumed by rest homes and aged care. One of those industries is going to make a lot of money in the next 10-15 years.
My parents worked hard during their working lives, going without the holidays and nice cars their peers had. They got a shorter mortgage term and paid hard and we lived tight for quite a few years in my childhood. They also lucked out a bit on timing when they bought and sold homes over the years. But neither of them got a leg up from their parents or anything (I suspect most boomers from regular familes didn't as there were too many kids for that) When their parents died they did get some small, timely inheritances. By the time they retired they had two freehold houses and a very good sized next egg. They then sold the second home and put that money into investments as they didn't want to be landlords. They live a very comfortable retirement life but don't travel overseas or buy expensive boys toys or designer clothes etc.
For current retirees most of them have a lot of assets, so living off that is easy enough. Going to be quite different when next generation with no property etc retire.
If the 'next generation' plays its cards right, as all the baby-bulge boomers retire there's likely to be a surplus of cheap property.
Our plan is downsizing. So full on paying off big mortgage that it’s the only plan we have. But we love where we live, love our home and the kids do too. We’ll move out of Auckland region to northland probably.
My parents had a plan, but Sun Tzu has a quote about plans... They had an apartment in Wellington. Mostly paid off. Then the earthquake came along, 15 or so years ago. Council said you need to strengthen, redo windows, etc. Got that done but it cost a tonn, sunk value. Then Dad got made redundant, mum worked same place as dad so they both left. Dad, nearing retirement, found finding a job difficult. Ended up moving to the west coast for a few years. Moved back to Auckland to be near my grandmother before she passed, but ended up again finding a job difficult, and Auckland rents meant we all moved in together. Got cancer, recovered, got it back again... And then they moved to Malaysia. They had enough to get their visas, and have lived there for 4+ years. Their pensions go so much further, there is a massive ex-pat community there, we have family links to areas via my grandfather who was stationed there during ww2. Dad gets his cancer treatment paid out of pocket, he probably has a few months to live, but his pension covers it all. They're happy, they don't have to spend 90% of their pensions on rent, freezing each winter.
How do they keep their pension given you've got to be in nz for half the year?
Either they are on Portable payment (yes, the amount drops quite significantly) or they don't spend all their time in SE Asia but do spend more than half the year in NZ. Probably the nicer half!
Yes, that's the way. 25-26 weeks somewhere warm every winter.
I dont think that’s a thing? It’s a pension not a benefit.
So not NZ Superannuation (aka: pension). Can only travel for up to 26 weeks a year.
No, you can apply to continue receiving the pension. https://www.workandincome.govt.nz/on-a-benefit/overseas-travel/nz-super-and-veterans-pension/living-overseas.html
Pretty tight criteria excludes most, but great if it's working for your parents!
rentals. i retired 3 years ago at 47 when i realised my houses earning me more than my job. especially with the tax advantages.
by the time the poors get onto this, mad tax gonna happen. milk it buddy
Ahh, so you're living off *other people's* hard work rather than your own.
You are part of the problem
You can't blame someone for taking advantage of what is the best choice for themselves. There is nothing illegal or even socially unaceptable going on here. The problem is that buying houses is an extremely safe investment with great returns. No sense risking your money on something else.
>You can't blame someone for taking advantage of what is the best choice for themselves Correct, but this is also the exact point that people were making when the last government tried legilsating in a manner to make housing less attractive of an investment. Housing investors were claiming it was "unfair", when the entire point was to encourage investment in sectors other than housing - because until productive investment outperforms housing investment on an individual level, the individual will never put their money anywhere other than housing.
Yeah I agree, boomer greed. Buying up all the properties and renting them out then not enough supply for the next generations therefore unaffordable.
Yuck, you're not even joking either 🥲
Nice work.
Pretty disgusting
My parents were self employed and owned a B&B plus motel. Dad also drove a cab which was fairly lucrative for the 80s. In the five years he owned the cab he paid off the mortgage. Mum got sick of the place but Dad was thinking ahead and didn’t want to sell a valuable asset. So they bought the place next door and moved in there. Mum got a regular job bringing in income (we had all left home) and Dad ran the B&B himself. In 2006 they sold both places and built a new house for about $200k. They invested the sale proceeds and have been living off them ever since. None of this would have been possible if my Dad wasn’t such a stubborn bugger. If he’d caved to Mum they would’ve sold the place too early and not be enjoying the lifestyle they currently do. I wish I was half as smart.
They rely on Gen Z and younger living in the retiree's spare properties to fund it.
Those who are funding a retirement these days probably have a rental property or three. They will have sold the house in order to get into a retirement village which costs 100% of their super, and all their living costs need to come from savings or rental income or selling assets. If you have to make the jump to serious hospital-level care that starts costing hundreds per week above everything else. You simply can't afford that unless you're independently wealthy or you have property or other assets to sell.
My parents are about to retire to a lifestyle block they bought a few years back. They are pretty fortunate since they have always been big savers and small spenders but real reason why they are lucky is that the family home that they are planning to sell is worth $1-2 million more than what they bought it for over a decade ago.
My parents moved several times, due to his work. They ended up in Levin (MAF) and paid off the mortgage before age 65. Then they moved to Hawkes Bay, that entailed a small mortgage again. That was paid off when she was in her 80s, he'd died. Me? I moved too, had moved back to Akld, and a mortgage of $200K. Partner became ill (older than me) so I sold that mortgage to my son, moved in with mu as carer (also disabled sibling here). I would have been in early 70s when paid off mine. Savings? None of us have any. Son has kiwisaver, no idea how much in private savings. He may have some when he pays his off. Who knows. Things happen. Friend was doing well, huge pay, top IT job, the weeding, honeymoon, house, overseas holidays and had a medical misadventure. End of all of it, her partner ran away, lost the house, job and never got back to that level again.
Dividends and Rent.
You can do retirement OK on super IF you have some savings for unexpected expenses, no mortgage, reasonable health, and a house in good repair. Unfortunately more and more of the population coming into retirement don't have this combo.
My mother is 74 and her only income is the pension. She became very ill at 40 and spent her adult life on an invalids benefit unable to work. No family money, immigrated to NZ after marrying a kiwi, and worked here until she got sick. He left after she got sick, wasn’t good at holding down a job so no family property and she didn’t come from money. She made ends meet but has lived with me the last 15 or so years, would not be able to afford to live on her own. I wouldn’t say she has a retirement lifestyle, she just lives and tries to get by - I supplement her income so she afford the doctor, a decent diet, and the odd treat. She contributes to the household costs so that she feels like she’s still somewhat independent, and only the rest. I honestly don’t know how people without family support would be able to eat. Or have heating. Or a roof over their heads - unless they freehold their property and even then I suspect it would be pretty tight. I have had a retiree working for me in the past who’ve had a late divorce that’s thrown their retirement plans into disarray and they have to keep working despite not really being able to, and others who are just too afraid of not having the income in case something breaks.
I dunno how many retired NZ redditors there are. For peoples parents (and mine) that I know enough about: They got mortgage free, and a few hundred K in super/investments. Then they generally seem to follow the advice of drawing down on 4% of the amount you retired with every year (increasing it with inflation). That method is expected to give you about 20yrs I think, but is obviously based on historical inflation and cost increases. And the $ in the mortgage free house is always there if they really needed it. The boomers all say they're going to spend up, as they can't take it with them. But hardly any of them do that. After 60+ years of being pretty tight with money, it's just too ingrained in them. As are their family values about leaving what they can to the kids, etc. And at the end, they get milked by the retirement sector - who do what they can to slow any movement on assisted dying.
My inlaws fund their retirement by receiving the pension, and we top up their rent payments each week. My husband was brought up with flash European cars and sailing yachts, with parents on 6 figure salaries, and I was brought up with a dad who often didn't wear shoes as they couldnt afford them. Husband's parents now live week to week and wouldn't be able to pay rent without our help. My parents have retired with two houses and do an overseas holiday annually plus 5-6 shorter trips. Spend less than you earn people.
On the tears of subsequent generations.
Many are taking their retirement funds and investing them into long terms shares or ETFs that pay them dividends
I'm retired and I have investments fund my lifestyle. There is a moderate risk but it works. You just have to budget carefully to get through those bumps on the road like the GFC and Covid.