Retirement Planning Basics

Many of us dream of a retirement that’s comfortable and enjoyable. Perhaps we envision spending a lot of time with our grandchildren, volunteering at a charitable organisation, or seeing more of the world on travel adventures.

While this is the retirement that most of us dream about, many of us also put off planning the entire thing. The reality is that if we continue to delay retirement planning, we go against our own vision of the future. As with all good things, preparing for retirement requires sensible financial planning, hard work, and persistence.

Here at Collaborative Consulting, we believe in providing resources that empower people to bring their retirement dream to life. Here are some basics on retirement planning to get you started:

Step 1: Set Realistic Goals
We cannot work hard to achieve something if we don’t know what we’re reaching for. The first step requires setting realistic goals and finding out what retirement really means to you. Not everyone’s dream retirement looks the same, so list down the things you may want to do or achieve once you reach retirement, then plan to save money accordingly.

Step 2: Evaluate How Much You Need
Before you start putting money away, you must figure out how much you will need. Contrary to popular belief, there is no such thing as a “magic number” when it comes to retirement savings – only you can measure what’s enough. Adequate financial requirements depend on many factors, including:

  • Standard of living during retirement
  • Projected annual living expenses
  • Medical costs
  • Target retirement age
  • Life expectancy
  • Income sources

Assessing your needs will help inform your choices at the next step:

Step 3: Figure Out Where The Money Will Come From
Your retirement funds can come from a variety of sources. Generally, most retirement funds come from employment savings, KiwiSaver and NZ Supers. Here in New Zealand, we’re fortunate enough to receive government pensions paid to Kiwis over the age of 65 through the NZ Superannuation. However, it’s never safe to rely on the bare minimum, as unforeseen medical expenses and other life changes can disrupt our financial stability.

Investing your savings to make them grow faster is another well-trodden path to generating passive income during retirement.

Step 4: Build A Retirement Nest Egg
Creating an investment portfolio that will fund your future retirement is essential. It’s about creating a financial investment strategy that works for you and fulfils your personal financial goals. Talk to a financial advisor who offers independent advice on savings and investment planning to help you create a comfortable nest egg for retirement.

Collaborative Consulting: Retirement Planning Experts

While we’ve provided a quick breakdown of retirement planning basics, there’s much more to it than what we’ve listed, including asset and estate planning, how to leave a financial legacy for your family, and much more.

If you need help reaching your retirement goals, we’re here to help. Together with our Auckland financial advisors here at Collaborative Consulting, we can help you secure your financial future. Contact us today for a free consultation at 0800 225 665!