The cost of healthy living in retirement

DOWNSIZING: NZ Super would still fall short as a sole income source if we ditched our luxurious dreams and settled for staying healthy in retirement.
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DOWNSIZING: NZ Super would still fall short as a sole income source if we ditched our luxurious dreams and settled for staying healthy in retirement.

How much does it cost to live well in retirement? It all depends how you define your needs.

A rash of surveys last year asked people how much they wanted to spend on top of NZ Super, netting estimates from $100 to $600 and up per week.

When shown the savings targets, many doubted they would get there. 

So what if we ditched our luxurious dreams and settled for staying healthy?

New Zealand Super would still fall short, found health economists at the University of Auckland.

There was no car, no trips to France and - slightly controversially - no booze in this budget. Cats and dogs and gifts for the grandkids were in, internet and cellphones were out.

Living this modest lifestyle, the pension was still short by $5600 to $7400 a year, said researchers Jessica O'Sullivan and Toni Ashton of Auckland University's School of Population Health.

In the best case scenario, a couple living together in their own home needed $109 a week from private savings, based on 2009 prices. A single renter needed $143.

What do we need?

People will have their own ideas about needs.

The bare-bones budget includes the minimum requirements for healthy living, with a self-imposed requirement that any healthy living needs had to be acceptably kosher - supported by "gold standard" research such as randomised controlled trials.

Warm housing and Vitamin D supplements were in; alcohol was not - it didn't quite meet the research requirements.

Those who hate cats or who want a wee dram can personalise the budget, which was based on national average costs in 2009, says O'Sullivan.

"It was really modest and conservative."


So what might a "healthy" retirement look like?

The first step, unsurprisingly, is getting out and about - something over-65s are less likely than average to do.

Using guidelines from the American Heart Association and American College of Sports Medicine, O'Sullivan and Ashton prescribed aerobic exercise at least five days a week and muscle strengthening and flexibility exercises twice weekly.

They reasoned people would get some exercise from walking, gardening and daily chores. On top, they added a weekly allowance for two group exercise sessions ($4 each), one swim ($4), gym gear and swimming togs (a few dollars a week).


One of the most surprising features was how little difference owning a home made - just $15 a week separated renting couples from home-owners.

The smaller-than expected gap between home ownership and renting was thanks partly to government subsidies for pension-aged renters.

What remained of the gap was all but closed by a hefty allowance for home repairs: $14.35 a week to get a home "as new" and another $43.19 for routine repairs and maintenance. The allowance for repairs was double the actual median spend by older people, but the study aimed to work out what people should spend, not what they did.

"If your standard for health is a healthy, dry, warm, safe home then under-investment over years in home maintenance can compromise that," says O'Sullivan. 

Renters were given enough for a one-bedroom flat in the cheapest quarter of the market, with a 15 per cent bonus to help secure a healthy property.

"We were trying to pitch everything at the absolute minimum so we were looking at the lowest quartile of houses. But those houses are highly unlikely to be the healthiest homes," says O'Sullivan.

The budget for rent was sliced to account for the state-funded accommodation supplement paid to older renters - $45 for singles and $66 for couples.


We are not talking warm fuzzies here but actual heat: a 21C living room and an 18C house, to be exact.

Researchers weighted heating costs to reflect New Zealand's different climes and the population distribution of older people. The final tally was $58.66 a week on average to heat a one-bedroom house to a healthy standard - or almost 19 per cent of a single person's pension.

When O'Sullivan put this figure to focus groups of older people they agreed with her vigorously about the importance healthy heating, then told her quite firmly that the cost was too high.

"They were quite clear they would never spend that much," she says. Warmth was just a matter of putting an extra blanket on, said one. The researchers did not cut the budget, though, because real people tend to spend less than is healthy.

Altogether, electricity, rent, home maintenance, rates and insurance came to $191.66 for a renter living alone, $170.66 for a renting couple and $155.95 each for homeowning singles and couples.


Meeting this food budget requires some domestic flair - for example, there is a lot of bulk cooking, says O'Sullivan. The cost of a healthy diet for someone in their mid 70s was put at $81.08 a week for men and $67.71 for women, including a Vitamin D supplement. 

The decision to shun booze caused debate, says O'Sullivan. "The English version of this does include a glass of wine a night, so you could go either way."

Her focus groups were pretty happy with the sample healthy menu, although some of them didn't think they needed to eat that much. In reality, statistics suggested retired people in low income households spent more like $57.50 a week each on food at the time of the study - at least $20 less than researchers estimated was needed for health.


Bad teeth? Bad news. If you munch a lot of sugar, take these costings with caution. The healthy living budget assumes people have their own teeth and rely on the public system for healthcare. If you've paid for health insurance throughout your life and want to keep it, you need to boost the budget, says O'Sullivan.

The allowance includes four GP visits a year and 19 prescriptions. The teeth allowance is modest - the equivalent of two fillings, a clean and a couple of X-rays a year. And you'll need to budget more if you are in the habit of losing or sitting on more than one pair of spectacles every five years.

Getting around

There are no limousines in this healthy retirement - not even an clapped out Morris Minor. Most travel is done off-peak on public transport, which is free for people of pension age. Weekly $6.40 is allowed for on-peak transport and $15 for one short taxi ride.

Social life

Now for the fun stuff. The one thing every person in every focus group agreed on was that having a decent social life was essential.

The groups felt the draft budget was a tad stingy on socialising, so the researchers tweaked it upwards. The activity list makes interesting reading: a few dollars for social clubs' admission and membership, another few bucks to cover the cost of having friends over, $7 a week for movies, concerts and sports games, $4 for newspapers and magazines.

Buying gifts for the grandkids will require saving at least $1.50 a week. There's $8-9 a week to save towards a one-week holiday each year to visit family in New Zealand. If the in-laws prove annoying, too bad - there is no allowance for paid accommodation. Green-fingered grannies and grandpas have $4 a week for gardening gear and plants.

And if the bulk cooking is going badly, there is $10.88 a week to eat out at a cafe.

Pets get $3 (so ditch the Doberman). Costs are tight. If the pooch is unlucky enough to need cataract surgery, presumably it is all over, Rover.

Finally there is $17.70 to pay for for a landline and television - no internet connection nor a cellphone.

"We included a fixed line telephone to call friends and kids but no mobile and no internet, which might be a little dated now," says O'Sullivan.

Remember, this is the healthy living minimum - cocktails on the Gold Coast are not included.

If that doesn't get you saving for a few creature comforts, nothing will.

What's in the budget for healthy living?


Vitamin D supplement
warm house
gifts for grandkids
cafe visits

overseas holidays
health insurance

What a healthy retirement costs (weekly)
Single renter - $453
Couple renting - $602
Single homeowner - $415
Couple homeowners - $587

Super shortfall (weekly)
Single renter - $142
Couple renting - $124
Single homeowner - $104
Couple homeowners - $108

Source: A Minimum Income for Healthy Living - Older New Zealanders, by Jessica O'Sullivan and Toni Ashton, published in Ageing and Society Cambridge University Press 2011.