Most Kiwis are aware that a gap exists between the cost of living at retirement, and NZ Super from age 65.
But despite the 3.09 percent increase to NZ Super in April, it falls short of covering all the expenses Kiwis face at retirement, and that gap is widening, latest New Zealand Retirement Expenditure Guidelines show.
Released by Massey University's Fin-Ed Centre on Tuesday for the year to June, the guidelines, which are based on current NZ Super rates, show even for a bare-bones retirement (referred to as 'no frills'), single people living in cities face a gap of $289.25 a week.
For those in the provinces, the weekly shortfall is slightly less, at $167.98.
For those wanting a lifestyle with 'choices', including some luxuries and treats, the weekly cost gap for singles living in cities is $591.95 per week, or $679.29 in the provinces. That's a lump sum of $600,000 ($688,000 for provincial areas).
On a cost per person basis, two-person households fare better. A 'choices' lifestyle is estimated to cost an extra $798.04 a week (cities) or $503.92 a week (provinces). That's a lump sum of $809,000 ($511,000 for provincial areas).
Only two-person provincial households living a 'no frills' lifestyle come close to being funded by NZ Super, but estimates show they'd still need savings of $75,000.
Report author Associate Professor Claire Matthews told Newshub the gaps found in the report highlight the need for Kiwis to plan how much they expect to need in retirement and work towards it.
"It shows people need to plan how they're going to spend their money on the other side," Matthews said.
This is particularly important for Baby Boomers, many of whom have around eight years' left before reaching the current retirement age of 65, she said.
For Generation X, the time frame is a little longer - the first of this age group will reach retirement age in less than 10 years.
Millennials have at least 25 years. This may seem a long way off - but it's never too early to start planning and saving.
The report shows there's a risk people will "struggle to live the lifestyle they want once they stop working," Financial Advice chief executive Katrina Shanks, said.
It highlights the need for people to think about saving from an early age.
Over the year, the cost of a no-frills lifestyle for singles living in cities has gone up by $22.59 per week (3.21 percent), ($35.55 per week for a 'choices' lifestyle).
Transport, housing and household utilities were the biggest sources of cost increases for superannuants, the report shows.
The report is based on Statistics New Zealand household economic survey figures, adjusted for inflation and reflects actual expenditure by retired households.
As each person's retirement savings goals will differ according to their age, income and financial commitments, those unsure how much they'll need could talk to a financial adviser.
KiwiSaver members could check if their KiwiSaver provider offers advice as part of their service.
Alternatively, online tools such as the Sorted KiwiSaver calculator and retirement calculator help Kiwis work out how much they'll need, and whether they're on track.
