31 Jul Don’t take your future finances for granted
When the Beatles formed as a rock band in Liverpool in 1960, the last thing on our mind was the thought of getting old, the need to plan for retirement, or the sort of lifestyle we would be living now. Likewise, it’s doubtful that we stopped to ponder the impact of the line from their infamous song, ‘when I’m 64’, which begs the question: Will you still need me, will you still feed me,when I’m sixty-four?
All these years later we are already, or are about to be, finding out the truth of that question. Back in 1960, you could plan to retire at age 60, and count on New Zealand national superannuation to provide you with a comfortable level of retirement income.
The reality is not quite the same some 50 or so years later… As reflected in increasing life expectancies, we are living longer and, because of the rising cost to the government to fund national superannuation, the official eligibility age has increased to 65. The topic has been in the news again recently and there is now pressure to push the eligibility age back further to 67.
Going back to the question above though, of who will feed you when you’re 64, the answer is looking increasingly like you will need to be self sufficient.
Currently, national superannuation will provide you an income at age 65 which varies between $268.40 and $348.92 per week. The exact entitlement depends on whether you are single, living alone, or sharing or whether you are married, in a defacto relationship or civil union.
The best approach is to not assume that your retirement will be taken care of by someone else. Instead, take control of your finances and your future and do the sensible things now, for example clearing debt and working to a budget so that you understand the income needs for your lifestyle.
It pays to plan ahead and have in mind a date at which you would like to retire, then you can work back from that in planning forward. You may be able to work part time in your retirement to supplement your income. Either way, allow for the unexpected – you don’t, after all, want to be part of the ‘S.K.I. club’ (spend kid’s inheritance). Your home is often your biggest asset and you can live in it during your retirement, but you can’t live off it, as it produces little or no income.
It’s never too early to start considering retirement. Starting early means the road is easier, as there’s a bigger head-start. To get yourself sorted and talk to a financial planning expert, give me a call. I would be happy to answer any questions or sit down with you to look at ways that you can create and protect your wealth. After all, we all want to live out our days in the manner to which we have become accustomed.
This information is of a general nature and is not deemed a ‘Personalised Advice Service’ as defined by the Financial Adviser Act (FAA) 2008.
Authorised Financial Adviser – FSP 76241
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