Jonathan Eriksen: Superannuation and Super Fund expert on the recommended savings for retirees

An expert is backing a recent recommendation that retirees need a decent amount of money to top up their superannuation. 

New Expenditure Guidelines have found less than $500 thousand in savings is enough for most over-65s.  

Superannuation and Super Fund expert Jonathan Eriksen told Roman Travers a nest egg is required to top up superannuation. 

He says Massey University's half a million dollar figure is right, adding if people want a bit more luxury for holidays, a million is probably needed. 

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Episode Transcript

Speaker 1 (00:00):
We've got more suggestions on how much you should put
aside for retirement. The latest retirement expenditure guidelines have found
less than five hundred thousand dollars in savings should be
enough for most retirees, but many are spending more. MASSI
universities say retirees should have additional income beyond superannuation so
they don't have to worry about running out superannuation, and

(00:20):
super fund expert Jonathan Erickson joins me now at morning.

Speaker 2 (00:23):
Jonathan Boding Roman things, Oh.

Speaker 1 (00:26):
I'm pretty broke, actually pretty broken and terrified really suggested, don't.

Speaker 2 (00:31):
Be, don't be, no, no, say. The key thing is
New Zealand super is not enough to live on, but
it's the best inflation proof income you can get, not
only in New Zealand but in most retirement systems around
the world. So what you need to do is to
build up a nest gig to top it up. And

(00:52):
Massy University is right. The target should be half a million.
And then if you want a bit more luxury and
you are be able to go on holidays every year
and go and visit the grandchildren in Australia or whatever,
then you probably need a million. But they are targets
and the key thing is to save as much as

(01:13):
you can and enjoy what you're doing for your work,
and to say be careful and look after your health.
So gym memberships all that sort of stuff are critical.

Speaker 1 (01:24):
Yeah, makes sense, doesn't it. What about for a no
frills household, no children to visit overseas, no desire to
go to every gig and show that comes to Eden
Park or the Caketon and Wellington.

Speaker 2 (01:35):
Yeah yeah, yeah, Well then then I still say you
need four hundred thousand because you don't know what your
healthcare costs.

Speaker 1 (01:47):
Where have you gone here either? You are you come back?
You just disappeared there for a bit, Jonathan, just repeat
that last.

Speaker 2 (01:51):
Sent Think it's healthcare and whether you can get access
to that on the public health system for more or
less free. So that's why I live in Auckland. I'm
quite close to north Shore Hospital. But if you have
to travel or you have to pay for healthcare privately,
then it may make the difference between life or death.
Having ten thousand dollars in the kiddy, how.

Speaker 1 (02:14):
Much has inflation and the cost of living impacted how
much you need to save for retirement?

Speaker 2 (02:19):
Yeah, it's put it up by twenty percent. So everything's
gone up, even the basics like food. But the key
things are rates if you're own your own home and insurance.

Speaker 1 (02:30):
Yeah, okay, Well, they always say that youth is wasted
on the young, don't they now, considering things will likely
get more expensive, should the younger generation prioritize savings for
retirement a whole lot sooner, and a whole lot more
than what they are now.

Speaker 2 (02:43):
It depends how much they're saving now. If they're saving
ten percent of their income, that's enough. But if they're not,
if they're living week page heat to paycheck or week
to week and spending what they make is though you
know there's no tomorrow, then that's a big mistake.

Speaker 1 (03:00):
Do you find that a lot of people get in
touch with you or just do you get the feeling
that most of us are terrified because most of us
are asset rich with you. If you own a home
in Graytown or Featherston, it's worth millions anyway, but you're
not selling it, are you?

Speaker 2 (03:12):
No? No, So there's reverse inuity mortgages. But this is
the problem people that shouldn't be terrified. There's fear doesn't
change anything, but Effectively, what you want to be able
to do is get some cash out of your house.
And when you're living in places like Featherston and Greytown

(03:32):
that you can't do any better quite frankly. But if
you're living in Auckland or Willington, you can sell up
there and go and live in the provinces and basically,
you know, live off the saving that you make in
the difference in the value of the two homes.

Speaker 1 (03:47):
Yeah, that makes sense. I'm going to be selling up
and moving into a camping ground, I think. Jonathan Erickson
a superannuation and super fun expert. Thanks for your time
this morning. For more from Early Edition with Ryan Bridge,
listen live to News Talks it'd be from five am weekdays,
or follow the podcast on iHeartRadio.