RETIREMENT CALC

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Minimum wage lifestyle out of reach for retirees

If you don’t have a million dollars saved by the time you’re 65, expect to work longer or accept your lifestyle will change. 

Since April 2020, a working couple on minimum wage would expect to make just over $70,000 per year. Not a lot, but more than twice what they would receive as superannuants. Put simply, if you haven’t got some savings or investments behind you, expect to struggle.

The Commission for Financial Capability recommends women plan to live to 94 and men until 91, although 20% of us will live even longer than that. That’s 26 – 29 years or retirement living to get through, which will hopefully be years to enjoy.

The numbers are terrifying though. A couple will need more than $1,000,000 saved, on top of the $652 per week superannuation they would receive, just to equal our minimum wage couple. A 40 year old who started saving today, needs to put away $795 every week for the next 25 years, starting right now. If you’re older, you’ll need to save more.

This is an impossible task for most of us. It’s just not realistic to save that kind of money, so Property Investors Club has released a free online calculator which can show you what your own savings requirements are, but also how to shortcut the system, by investing $50, $100, $150, or $200 per week into property instead.

The calculator assumes that money would be spent purchasing one or more rental properties, with no deposit, so you would need to own your own home already, which can be leveraged for bank lending. It also assumes you’d sell your properties at retirement age, but in reality some would prefer to keep those income producing assets, throughout their retirement years. 

With interest rates at record lows, owning rental properties has never been more affordable. The reality is, rental income is outstripping interest and holding costs for most investment properties, but Property Investors Club suggests all investors should be budgeting for the possibility interest rates might increase again in future.

Property Investors Club turns everyday kiwis into successful property investors and manages the entire process for them.

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