What's Your Retirement Age?

I’m not talking about how much money you need to have a decent retirement but the ‘retirement age’ - as 65 really isn’t the magic number for retirement anymore. Nowadays, there's a good chance that we might live to be 90 or older, so reaching 65 no longer signals the beginning of the end - more like a new beginning.

Whilst 65 is the age associated with retirement largely because it's when we are entitled to receive NZ Super,  here in NZ there’s no official retirement age. The current age-based system assumes people will draw the pension for around 20 years, but in reality, it’s probably now closer to 25 years.

Will the Retirement Age be Increased?

Whether to raise the retirement age is a political ‘hot potato’ and when, how, and to what remains to be seen. Any changes regarding this though are out of our control, so let’s concentrate on what retirement should look like. Retirement should be a time to indulge in personal pursuits, focus on ourselves, our loved ones and basically celebrate having survived so many years of ‘adulting’.  

Let's Consider the Issues

Pre- KiwiSaver, many people had to survive solely on the Super, meaning retirement years were often marked by financial worry and instability. KiwiSaver has alleviated this problem somewhat but taking control of your financial future, understanding your investment journey, and having a trusted adviser are still important.

A concern when approaching retirement, as we saw last year, is when there is market volatility at the very time you are wanting to withdraw your retirement funds. We reassure clients how this is purely down to unit pricing which will pick back up, but having a diversified portfolio and investment strategy certainly helps guard against this.

How We Can Help

You also shouldn’t simply pull out your entire retirement fund when you retire, if you are not intending to spend it straight away. You’ve got another 20 years of fund growth to work for you! Also, when calculating what you need to live on, do not simply divide your fund equally per year.  You’ll probably be spending more in the early years so break it down to three components (live it up years; slow go years and no-go years).

So, use Foresight as there is a lot to think about. We listen to your journey and discuss options for your personal situation, enabling you to feel in control and able to make informed choices, rather than knee-jerk reactions.

Give us a call as we’re happy to help.