You don't have to be rich to enjoy retirement

Liz Koh.

There is an avalanche of baby boomers who are retiring. The burning question for most of them is "How can I live on NZ Superannuation?" A couple who both qualify for NZ Superannuation receive about $576 a week after tax. That's a little less than $30,000 a year. For people on an average or above average income, it is a big drop.

Research released last year by the Commission for Financial Capability gives some clues. A survey of people aged 50 and over showed that most retirees have at least some savings and investments. Of those surveyed, only 28 per cent said they had enough money to do all the things they wanted to do in retirement. Those without savings and investments were significantly more likely to be struggling to make ends meet.

The conclusion is that NZ Superannuation is not enough to provide the kind of retirement most people want.

Everybody's retirement expectations are different. Happiness in retirement comes when expectations can be met by available financial resources. The lower your resources, the lower your expectations will need to be in order to be happy.

This might mean living in a cheaper house, moving to a small town where living costs are lower, finding pleasure from spending time with family and friends rather than expensive possessions or overseas travel, taking up hobbies that don't incur big costs, and becoming more self-sufficient with food and energy. It is possible to live a happy but frugal life.

If you would rather increase your resources than lower your expectations, your options include continuing to work (perhaps part-time), sharing your home with others, selling all or part of your house to family, borrowing from family, or taking out a home equity loan.

A happy retirement is all about cutting your coat according to your cloth.

- Liz Koh is an authorised financial adviser. The advice given is general and does not constitute specific advice to any person. A disclosure statement is free. Call 0800 273 847. For free e-books, see moneymax.co.nz and moneymaxcoach.com