Four tried and true ways to plan for retirement
By Fisher Funds
07 September, 2016
We know that many working people are not adequately preparing for a comfortable retirement. A recent survey confirmed that more than 50% of people were unsure how much their KiwiSaver would be worth at retirement, or how much income they'd need once they were retired.
HSBC recently surveyed a number of Australian retirees and asked what they would do differently before retirement, if they had their time again.
Two in five retirees admitted to not saving for their retirement early enough. Starting early and making small contributions to your retirement fund allows your money to grow through compounding and reduces the burden of saving much larger amounts later in life in order to catch up. Whether it's increasing your contribution rate or adding to your KiwiSaver account occasionally, there are many ways that can help boost your pool of funds in retirement.
Not being able to afford it
A quarter of retirees said they could not afford to prepare adequately for retirement. However, they acknowledged that if they had budgeted better and kept a closer eye on their finances, many could have allowed for some surplus funds to be directed to their retirement savings.
Didn't know how much to save
Three in 10 retirees said they did not know how much they needed to save for a comfortable retirement. We have online tools that can help you work out if your current level of savings is going to achieve the nest egg you will need. If there is a gap between what you earn and what you're going to need, our team can give you some direction on how to narrow the gap.
Paying off other debts
One in 10 retirees cited paying off the mortgage as one of the biggest obstacles in preparing for a comfortable retirement. And 16 percent of retirees said debt repayments were a barrier to saving. Repaying debt can put a large strain on limited cash flow in retirement. Ideally all mortgages and debts should be paid off before retirement. While it's not always easy, having a plan well in advance can make debt-free retirement a reality.