Adjusting peoples' retirement savings for inflation has
dented the confidence of those putting a nest egg aside, an
ANZ survey has found.
For the first time since the bank started its Retirement
Savings Confidence Barometer ANZ factored inflation into
people's savings targets.
The survey asks people how much in addition to New Zealand
Superannuation they would like to live off in retirement and
then tells them how much they will have to save to get there.
It then asks how confident they are of reaching that savings
When inflation was included only 39 per cent said they were
confident of reaching their savings' goals - down from 50 per
cent in October when the last survey was undertaken.
John Body, ANZ wealth managing director, said the results
showed many people had not factored inflation into their
"If you've got more than 10 years before you retire, then
you'll need to think about how inflation will impact the
buying power of your savings."
For a 30 year old planning to have a retirement income of
$200 per week on top of New Zealand Super the target would
probably need to be double today's money when they reach 65,
"The change to our survey provides a more realistic financial
target for the retirement lifestyle people want to have."
The change prompted 28 per cent of those saving to say they
would increase their contributions to KiwiSaver.
A further 58 per cent said they would not change their plans
despite seeing the impact of inflation but accepted they
would need to save more.
Body said people could increase their saving or change their
investment approach to help counter inflation.
They survey questioned 989 people aged between 15 and 54 in
January and February.
- By Tamsyn Parker of the New Zealand Herald