Ed McKnight: How easy is it to live off the pension?

Nearly a million people in New Zealand are currently receiving Superannuation, getting payments of between nearly $600 and just over $1000 every fortnight.  

But in this cost of living crisis, how easy is it to survive on the pension? 

Ed McKnight tried living on it for a week and came to a couple of conclusions around what it would be like to retire. 

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Episode Transcript

Speaker 1 (00:07):
You're listening to this Saturday Morning with Jack Team podcast
from News Talks That'd be.

Speaker 2 (00:12):
Ed McKnight from Opie's Partners is with us this morning.

Speaker 3 (00:15):
Hey, Ed, great to be here, Jack.

Speaker 2 (00:17):
You have come up with a fantastic idea for a challenge.
I don't envy you, but give us the details.

Speaker 3 (00:24):
Well, one of the big questions that a lot of
New Zealanders worry about it. There's a lot of anxiety
around this is can you actually live on the New
Zealand superannuation? Because sometimes you read news articles that say
absolutely not, it's impossible, and other times you hear actually,
some people are doing okay. So the challenge that I've
come up with is could I live on New Zealand

(00:46):
Super for a week so that I can find out
that answer for myself? Is it enough for me? So
that's about five hundred and thirty nine dollars if you're
a single person, or eight hundred and twenty eight dollars
a week if you are a couple. Now, if you
are going to do this challenge, there are there's some
good news. If you own your own home and you're
currently paying your mortgage, hopefully that will be gone by

(01:06):
the time you retire, so you don't have to count that,
and as I discovered, some of your commuting costs really
start to add up. So the challenge started and I
called up my friend Andrew and I said, come on,
we're going to try this for a week, and with
no planning, no preparation, we just started tomorrow. And I

(01:26):
tell you what, Jack, it does make you really conscious
of what you spend. So of my five hundred and
thirty eight dollars a week, my daily parking in the
city was four percent of my pension is paid.

Speaker 2 (01:37):
Oh wow, yeah, of course, and that's every day. So
if you're going into work over the space of a week,
you've got twenty percent of your pay gone.

Speaker 3 (01:46):
Yeah. Now, hopefully, if you're going to be retired, you're
not going to have to worry about that, so you can,
you know, you can be a little bit nice to yourself.
But I realized that even though I'm having porridge in
the morning, that was still costing five dollars a day,
and I.

Speaker 2 (02:00):
Was like, wow, no, no, no break. Yeah right, oh
my gosh.

Speaker 3 (02:06):
So my friend Andrew, on the first day of the challenge,
he said, look, I'm going to be really money smart
and I'm just going to skip lunch in order to
save money. And then by the time he gets to
four o'clock he's too hungry, so he goes out and
buys it. But what that made me realize, Jack, is
you sometimes read about people skipping meals and you think,
do people really do that? And the day one of

(02:28):
Andrew just trying to live on the pens are his
pay and they're already getting into skipping meals, I was like, Wow,
this is the reality. Filling up your car that also
will scat it jesus out if you're that offered, costs
over one hundred dollars. And so what this challenge made
me realize is if you are going to live on
enzet Super, you do need to be a really good planner.

(02:50):
You're probably not filling up your car every single week,
You're probably not going on their road trips. And the
thing that this also taught me is that if I
was to just live on the penchant, I'd need to
live a really really simple life, you know, not doing
too many things, because the cost these days really really
add up. Yeah, the reason I like this is that

(03:12):
there is a lot of anxiety around retiring and people
think he has the pension enough. So I reckon people
should give it a go because if you find you
can look on super great happy you don't have to
worry about your retirement, and if you can't, maybe this
will sk you into doing something about it.

Speaker 2 (03:27):
Yeah, I just think it's such a valuable kind of,
you know, exercise for people who are approaching retirement and
want to see in real terms how they would get by,
and probably in some cases a bit of a you know,
a bit of a lightning rod, a bit of a
kickup the backside to say, you know what, do what
you can now to supplement spit if that's not going

(03:49):
to be enough.

Speaker 3 (03:51):
And well, my question for you, Jack is are you
going to give it a go? Now?

Speaker 2 (03:55):
You know what, I reckon it's going to be two
tricky yed and I swear I'm not just saying that
only because hopefully when I'm retired, I won't have two
little mouths to be And how mortgage payments are significant
as well, so you know, I could take that out
of things, but yeah, maybe I could come up with

(04:15):
a version of it where at the very least I
was forced to confront some of that kind of discretionary
spending like buying my lunch that perhaps I don't give
as much thought to as I should, you.

Speaker 3 (04:27):
Know, And the main thing is just making it real
for every person because we each have different lives in
different ways that we go about our days if we've
got to go to work or we work from home
and all of these things. But if we strip it
back and take out some of those expenses and think, well,
what does the pension mean for me and my life,
and would that be okay? You're going to get one

(04:48):
of those two answers. Actually, I'm going to be totally
happy on super and I no longer have to worry
about retirement or well, I need to get my a
into g and start investing. I was speaking to a
lady who gave us a go after hearing us talk
about it on our podcast, and she said, God, ed,
I really need to invest, because that's not going to
be it for me. Should be just lo it. Onion

(05:09):
said super.

Speaker 2 (05:10):
Yeah. See, just knowing that is such a valuable kind
of lesson and knowing it, hopefully with a little bit
of runway between you know where you are now and
where you are going to be come sixty five. Or
sixty seven or whatever the superage is when you get
to that time of life. Thank you so much, Ed,
what a great exercise. Really appreciate that is. Thanks check
there is Ed McKnight from op's Partners.

Speaker 1 (05:31):
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