How much is $400 trillion? It doesn’t sound much when you read it as two words but when you see it in its entirety, it is $400,000,000,000,000.
So why am I telling you this?
Well quite simply, it’s all to do with a recently published report by the World Economic Forum (WEF) that predicts a worldwide $400 trillion shortfall in retirement savings by 2050. They define a shortfall as anything less than what’s required to provide 70% of a person’s pre-retirement income via public pensions and private savings.
Multiply this picture 399 times to imagine what $400 trillion looks like.
From my point of view, having a retirement fund equivalent to 70% of your pre-retirement income “is the magic figure” that we work to as advisers.
So how do you deal with this shortfall? Do you know how much you need to save for your retirement in New Zealand?
We have a simple 4 step process that will show you if you are likely to have a fund shortfall at retirement:-
i) Project your current earnings through to retirement age
ii) Calculate the retirement fund you will need to retire on 70% of your pre-retirement income
iii) Offset what you will receive from NZ Super
iv) Take in to account any existing retirement savings you currently make (and fund values)
Armed with this information, you can then decide what you want to do going forward to bridge any retirement shortfall. Actual shortfall figures for New Zealand are not known but Australia sits in seventh place with an estimated $9 trillion shortfall.
Read the full article here https://qz.com/994596/the-world-faces-a-400-trillion-disaster/
To discuss your retirement saving options, give me a call at Foresight financial.