According to recent news articles and The Financial Services Council, we should be aiming to save a lump sum of $350,000.* But is this really enough? Well that depends on what kind of retirement you want.
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The truth is, there simply is no magic figure. How much you need for your retirement depends on your own unique financial situation and what kind of lifestyle you want when you get there. Rather than guessing how much you’ll need to retire comfortably, we encourage you all to spend a few minutes putting together a bit of plan to see how you’re tracking. So what things should you think about in your retirement plan? Here’s a few things to consider:
Start at the end - A good place to start is by thinking about what kind of retirement you want. What kind of things will you be doing - travelling, spending time with family, new hobbies? As you won’t have a work income anymore, you need to think about how much you’ll need to do all the things which will make your retirement an enjoyable and fulfilling time of life.
NZ Super - It’s great that we have a Government Superannuation scheme in NZ. However, this will only ever provide for the absolute basics and with an aging population, it’s likely that that the scheme will change in years to come. The most likely outcome is that the retirement age will be extended by a few years, therefore you cannot rely on this kicking in at 65.
Make sure that you’re in KiwiSaver - KiwiSaver alone is unlikely to be enough to fund your retirement but it’s a great start because of all the ‘free’ money and incentives you receive. The earlier you start the better – a little, long term is more beneficial to your fund than a lot later on!
Work it out - When a large sum of money is mentioned, such as a retirement fund it can often be seen as unattainable. However, at Foresight Financial we have some great software for calculating if you’re on track for retirement. Many of our clients have been happily surprised to see that they are heading in the right direction and how a few tweaks here and there, can make all the difference. We believe it’s well worth a little bit of thought and time now to enable us to help you have confidence that you have a manageable retirement plan that is tailored to you.
If you’d like to book a free session with us to try out our retirement calculator or just talk through your financial planning, then feel free to get in touch. We can talk through all the options and find the best solution for you and your retirement.
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