Claire Matthews: Massey University Associate Professor on the latest retirement savings figure

We're being told not to be scared of the latest retirement savings figures. 

The latest Retirement Expenditure Guidelines have found less than $500 thousand in savings is enough for most retirees. 

Massey University Associate Professor Claire Matthews told Mike Hosking that research consistently shows that the amount people need to save for retirement is less than other people would suggest. 

She says that if you start early, the amount you need to save isn’t as daunting, since you’re saving for a much longer time frame. 

LISTEN ABOVE 

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
New insight into how much we need to save for retirement.
Massive university research is suggesting this morning we can get
by on less than half a million dollars? Can this
be true? Report author and associate prophysically and Matthews is back. Well,
it's clear, very good morning to you.

Speaker 2 (00:13):
Good morning, Mike.

Speaker 1 (00:14):
Do we we do this each year? As far as
I know? Is the number change much over the years?

Speaker 2 (00:19):
Oh? Yeah, it does change as it reflects levels of
spending and other economic conditions, but now not hugely different.
And we do consistently show that we don't need to
save as much as other people would suggest is required.

Speaker 1 (00:35):
Okay, so the criteria you don't you can't have a mortgage, right.

Speaker 2 (00:39):
Well, it's not so much that you can't have a mortgage,
it's that the current retirees whose expenditure we're reporting on
don't generally have a home loan and are not generally renting.
So we're talking to baby boomers who've retired, well, not
personally talking to them, but that's whose data we're reporting on.
So in the reality that is that that generation is

(01:01):
likely to have gone into retirement in their own home
without a home loan, and therefore that is reflected in
their spending. Yes, if you go into retirement, we're still
with a home loan and or in rental accommodation, then
it is likely to require you have slight anymore.

Speaker 1 (01:19):
Crystal Ball, when I talked to you in twenty years time,
thirty years time, and know when young today has been
able to buy a house. Is all this going to
change dramatically.

Speaker 2 (01:27):
There's potentially going to change, but we'll start to see
the changes probably in about ten years, by which stage
will be having when I had about five years worth
of the next generation Generation X having retired, because we've
still got baby boomers retiring for another five years and
even some of the early generation XES. So it's still

(01:50):
quite possible. And that's why you start early, because if
you start early, then the amount that you need to
save isn't it as daunting because you're saving for a
much longer time frame.

Speaker 1 (02:00):
Big still a big gap between the city and the
rural part. Has that gap changed much over the.

Speaker 2 (02:05):
Years, No, it hasn't changed that much. And it just
reflects that there are different costs of living depending on
where you live. And it also reflects that potentially people
live in those different locations because of the different lifestyles that.

Speaker 1 (02:19):
They want, and to be fair, it's still a very
individual thing, isn't it. I mean, it depends on what
sort of life you want. Half a million can be plenty,
half a million can barely scrape the sides.

Speaker 2 (02:31):
Absolutely. And this is not saying this is what you
should definitely aim for. What it's saying is that this
is what retirees are doing, and that you know they
are living quite comfortably and these are the amounts that
they are using to do that. But it's your users
to provide information and talk to a financial advisor about
what you specifically are looking to do in your retirement

(02:53):
and therefore how much you need to achieve that nice stuff.

Speaker 1 (02:56):
Clar Good to talk to you again, Claire Matthews out
of Massi University this morning. For more from the Mic
Asking Breakfast, listen live to News Talk SETB from six
am weekdays, or follow the podcast on iHeartRadio