Carrot or stick? Inspire or scare? I have always been a fan of the positive. So when retirement comes to mind, it’s mental images of relaxing tropical islands, steaming bowls of pasta after days spent on the Italian ski slopes and new cars. That is not the reality for most of us. In fact it couldn’t be further from the truth. Retirement can and will be very hard for many Kiwis.

Last month the New York Times ran an article that caught my eye and inspired this note. Entitled “Too little, too late” it shares research from the US-based Consumer Bankruptcy Project which notes that bankruptcy rates for people over 65 is three times today what it was in 1991. This is an alarming trend.

We are lucky to live in New Zealand where we have a more comprehensive support network for aging yet the themes noted in the research should send a chill down the spine of any of us contemplating retirement. As the study notes, social safety nets as we age have been reducing, at least in the United States, and I suspect here as well. This means the financial risks associated with aging; reduced income, higher healthcare costs, an inability to recover from financial losses, are passed to individuals rather than being the responsibility of the state. Couple that with more debt as we struggle to pay off the hefty mortgages that are commonplace and it’s not hard to see Kiwis could really struggle in retirement.

At the same time we having to take more responsibility for protecting ourselves in retirement, the theme of individual responsibility applies to our savings. Yes we get support through vehicles like KiwiSaver, but ultimately the decisions we make around are financial futures are our own.

These are weighty, difficult, long-term decisions. How much do I need to save? What’s the right investment strategy? What should I do if market conditions change? And frankly, do I really understand what I am investing in? While most people I talk to are grappling with these questions, too many are further from the answers than they are from the questions. Many haven’t even asked the questions yet.

This is something we all need to address. Today.

Taking action

Seek advice from your friends, family or trusted advisors on managing those hard to afford bills and reducing your cost of living. Save more. Invest in the right fund that will enable your savings to grow. It’s just like exercise. We all know we need to do more but getting started is the hardest step. The reward of knowing you are financially secure is truly worth it.

I don’t want this to sound like corporate jargon, we all get sick of that, but Fisher Fund’s purpose from when we were founded twenty years ago was to inspire Kiwis to develop a lifelong passion for investing. Most importantly we are here to help our investors feel in control of their financial futures. Talk to us. Please.