Lack of savings leaves many seniors 'not ready' for pension life

FILE

Many of Rotorua's elderly are not prepared for life on the pension and are merely "existing", according to Grey Power Rotorua president Rosemary MacKenzie.

Retirement is meant to involve more time spent with family and friends, not worrying about how you might afford car repairs, rates increases or other unexpected costs, according to Mrs MacKenzie.

This comes after a study released by the Commission for Financial Capability and the Financial Markets Authority showed almost half of people over 50 have not worked out what they need to save for their retirement - but Mrs MacKenzie is surprised the number is not higher.

"I don't think anyone's prepared for retirement and how little money you will get. People really have to change their lifestyle once they are on the pension.

"It's almost a discussion we need to start having in schools. The superannuation will allow you to exist but not allow you to have a life."

She said once you were 50 it was almost too late to save for your retirement, but you could take pre-emptive steps to avoid future costs.

"Before you retire, replace all your whiteware and make sure any big jobs around the house - like a leaky roof - get dealt with."

She said KiwiSaver had worked well for a lot of people.

Craig's Investment Partners Rotorua investment adviser Malcolm Thomas said it would be difficult to live on the pension alone.

"The typical thing we find with people is they want to buy presents and visit family in Australia, but they can't.

"If you want to be able to carry extra expenses then you will need to have other sources of income.

"The thing that surprises me is the number of people that don't buy into KiwiSaver. Given that there are incentives for the taxpayer and contributions from your boss, people should be starting that off as soon as possible."

He said people should prepare for their retirement as soon as possible. "That's especially for young people. If you are 30 now, in 35 years' time we don't know what you will be getting in your superannuation. That's even more of a reason to start saving."

Rotorua Budget Advisory Service public relations officer Pearl Pavitt said a lot of people were not able to save.

"Consumer goods now are pretty expensive and rents are expensive, and for some people on lower wages it is very hard to make ends meet.

"It's so easy to borrow money and I think there's so much advertising that savings get put on the back burner.

"There are a lot of people who don't have money put aside. The ease with which money is out there encourages people to buy."