Aspire to Retire
Fronting Up to a Grey Matter
Our population isn’t just booming, we’re living longer and we’re choosing to work longer. The world over is experiencing a migration of millennials and seniors. New Zealand is home to a ‘silver wave of workers’ – as described by Statistics New Zealand – and a generation of millennials – “who are forming the backbone of various regions’ emerging labour forces and consumer bases,” says global research company, Brookings Institution. Throw into this mix the rise of the ‘gig’ economy, a movement towards increased flexibility in the workforce, as many of us shun the ‘one job for life’ mindset and embrace freelance and contract job opportunities for multiple skills.
With so much change happening on the horizon, how should we broach the subject of retirement planning? Especially as we all sit in different driver’s seats.
For many, retirement planning is likely to stem from risks taken in our mid-years – buying property or businesses – pushing the returns on investment.
But, for those of us coming into retirement, we might steer more towards returns on life – as opposed to investment. Instead of tying up money in another property, our hard-earned dollars might be better invested in something more liquid – i.e. shares – so we have ease of access to cash as and when required.
The disciplinary faction…
Aiming for holidays away with the grandchildren? A motorhome to travel around in? Achieving those retirement ambitions requires discipline for the majority of us i.e. staying on top of the mortgage, working hard in our businesses – regardless of the ‘gig’ work type or opportunities we choose to follow.
And, getting into KiwiSaver as early as possible is a fail-safe way of steadily saving towards your future and retirement, says Ali Murray of Empower Insurance.
“The great thing about KiwiSaver is that you can choose to access your funds if you are a first home buyer, have suffered a serious illness, a significant hardship, and upon death it will be paid to your elected recipient. Or from the onset save for the future until reaching retirement age. It’s controlled, it gives New Zealanders – of many whom haven’t ever considered investing before – access to a diverse investment portfolio without having to step outside their comfort zones.”
Considering different insurances – medical, trauma, income protection, mortgage protection and life – in your younger years stands to benefit you considerably in later years, explains Ali.
Protecting your income is your biggest asset, says Ali.
“More working age Kiwis are disabled by illness than accident. It is much more affordable to take out medical and life insurances when you are younger before you experience medical conditions that then become pre-existing conditions,” she says. “Life insurance in your mid-30s may only cost $18 per month, and in your later years it is a nest egg to protect you or your spouse in the unfortunate event of either one of you passing.”
Relying on superannuation or an inheritance windfall in later years is also not a 100% given – ‘she’ll be right’ doesn’t always play out, cautions Ali.
“If you’re not planning on getting into the property market – at any stage of your life – then prioritising your insurances and KiwiSaver, and implementing additional saving goals, will set you in better stead to supplement your retirement. Taking the ‘worry about it later’ mindset just won’t do it. Look at your lifestyle now and consider how you want to live in your retirement – for many superannuation just won’t cut it.”