You probably don't want to lower your standard of living when you retire - after all you won't want to stop eating and drinking, taking holidays, buying clothes, visiting friends or relatives, or enjoying yourself in other ways. But how much is enough? Working out how much you'll need in retirement depends on what you expect your cost of living to be. How can you work that out?

Decide whether home ownership or renting is better for you - this will affect the amount of savings you need when you retire. If you rent, you'll need substantially more savings to pay the rent, but you won't have capital tied up in a home. One of your aims should be to reduce the risk of financially unpleasant things happening to you after you stop working. Owning the place you live in, debt-free, will reduce those risks. You won't need to worry about rent increases or being asked to find a new place to live. Against that of course, you need to budget for the costs of maintaining your own home, paying the rates, and so on. One way is to base your annual retirement income needs on 70 percent of the annual income you expect to be receiving just before you retire. If you're well away from retirement, just take 70% of today's pay. This is usually a good approximate measure to maintain your pre-retirement lifestyle. While the amount of money you spend in retirement on some things may go up (e.g. health care), in other areas (e.g. education and housing) it may go down.

‘No Frills’ reflects a basic standard of living that includes few, if any, luxuries.

‘Choices’ reflects a more comfortable standard of living, including some luxuries/treats.

‘25 year lump sum’ based on living until age 90 (average life expectancy for NZ females).

*Source: 2015 Workplace Savings NZ/Massey University study – New Zealand Retirement Expenditure Guidelines 2015

**Source: www.workandincome.govt.nz July 2016, Assuming Tax code M applies

We’re pleased to announce two recent independent ratings that demonstrate AMP’s commitment to offering great retirement solutions for our customers.

In September, the AMP Default Fund in the AMP KiwiSaver Scheme was awarded 5-stars for ‘outstanding value’ in the conservative category by CANSTAR. This month, the AMP KiwiSaver Scheme received a 2018 Gold Rating from SuperRatings, in recognition of its full value offering for customers.

CanStar KiwiSaver Star Ratings takes into account the extensive range of features offered through the AMP KiwiSaver Scheme and in particular the low cost structure and performance of the AMP Default Fund, backed by the strength of AMP’s overall KiwiSaver proposition and support services. Our default fund was only one of two conservative funds that received this rating. This rating is a fantastic endorsement of the AMP Default Fund and good news for our customers.

SuperRatings assessed KiwiSaver Schemes based on five key factors, including investment, fees, member servicing, scheme administration and governance. The AMP KiwiSaver Scheme achieved a Gold Rating, which recognises it as ‘good value for money’ that is strong in most assessment areas. SuperRatings comments positively on our shorter term returns which bodes well for the future.

Your adventure awaits! Click on the image to play with the new AMP calculator to get your first home or retirement journey underway.