Carly Flynn takes a one-week venture into retirement
TV presenter and journalist Carly Flynn might not need to worry about retiring for a decade or two yet, but when it comes to financial security in old age it doesn't hurt to get a heads up on what to expect.
The 37-year-old has spent the past week experiencing life on $374 a week – the estimated amount she might earn as a retiree, based on an average New Zealand salary if she works until age 65, and superannuation stays the same.
Flynn took the frugality challenge for New Zealand Money Week, an annual campaign to get people to think about their personal finances. The focus this year was to engage people with their KiwiSaver account.
Her budget was a paltry $53 a day, which once bills were deducted shrank still further, to a meagre $24.
The week was spent in activities typical of the average retiree: gardening and going to the library – "in other words, things I could do for free".
Her daily latte was a goner, and a wine night with friends was skipped. Meals consisted of culinary delights such as porridge, tuna, spaghetti and eggs on toast.
All in all the North Shore mum of two found the exercise to be "a real eye-opener".
Flynn reckons living on $374 is "definitely achievable" and she knows thousands of other Kiwis do it every week. Some manage on even less. But it would be nice to have a little extra at the end of one's working life.
"I think I'd like more for when I retire so that I can travel and still shop."
Flynn joined KiwiSaver eight years ago but has been categorised as having a "set and forget" approach to her retirement planning. An inspection of her savings gave cause for alarm and she decided to double her contribution and change her fund and investment type.
"I did a bit of research before I accepted the challenge and realised my own KiwiSaver savings were pretty abysmal and I'd have bugger all to live on at 65. I thought right, yeah, I actually have to do this health check because no one else is going to look after me.
"It's interesting. We all sort of think that someone's going to look after us once we turn 65 or that we'll flog our Auckland properties and go and live in the provinces.
"The reality is if I don't start saving now I'm going to have a pretty miserable retirement, or not the kind of retirement I imagine for myself."
And that's a reality a few Kiwis might need to face. A recent Westpac-Stuff poll of 700 people found only 15 per cent believed themselves to be in a financially comfortable position to retire, while 43 per cent had done nothing at all to prepare for retirement.
According to Westpac's head of wealth products Nigel Jackson "New Zealanders are pretty poorly prepared for retirement".
Flynn says she began the week unsure how she would fare. In the end, she was lucky enough to receive a heap of tips and tricks she intends to keep using. She had also been given plenty of feedback from friends and relatives – including one very happy father.
"This is a dream for my Dad. He's tried to preach that sort of stuff forever."
Written by Josh Fagan. First appeared on Stuff.co.nz.
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