I'll be straight up: I cannot picture being retired. I cannot envision what my retirement will look like. I mean, I imagine it'll look similar to life now, but with less work and more animal/garden time. But it's like a channel on TV or a station on the radio that I just can't seem to tune into clearly.
Nonetheless, I'm taking retirement planning more seriously and trying to figure out this whole saving for retirement thing. How much I am going to need in retirement? Figuring out the costs of retirement is proving tough.
For one, inflation's a bitch. I've been using this calculator to do projections - trying to work out, for example, what groceries and utilities might cost in 40 years. It looks like at 2% annually, I can expect any given amount to basically double. At 3%, it would more than triple.
For another, I expect to outright own my home. That said, I will have to keep paying insurance and rates (both are about $1200 a year currently, or $2400 total). And then there's repairs/maintenance (again, huge question mark there).
Housing in retirement is a huge factor, though. Let's take a look back at the past 10 years (2006 compared to 2016, which are basically the exact years I spent as a renter) in NZ. The RBNZ calculator suggests there was a 5.3% compound average annual rate increase in the cost of housing over this time period. Definitely gels with my experience - a decade ago you could get a 3 bedroom rental for $350 in my old neighbourhood, nowadays that would get you 1 bedroom...
But then there's new costs to consider. Fun ones, like travel - will I be spending more on travel? How much? I mean, I could easily spend TONS travelling, but I'll have to stick to a budget of some sort.
And the not so fun, like healthcare - will individuals be expected to shoulder more of our own health costs in 40 years? Will I have health insurance at that point? Will I be in good, average, or poor health? My mum is going through some health issues right now. She texted me the other day to say she thinks she needs to look into hospital insurance cover, and finally admit she's getting into her old age.
