40pc lack funds to retire
Kiwi retirees need to be extra cautious throughout their retirement – even if they manage to be debt free by the time they turn 65.
That’s the reality faced by New Zealanders in the years ahead according to a survey commissioned by 50-plus community website, GrownUps.
More than 600 Kiwis aged 50 or older revealed the state of their financial health in the survey with results showing the economy is having a detrimental effect on the retirement plans of everyday New Zealanders. Almost 41 per cent of people are feeling worse with regards to their savings and financial situ- ation than they were 12 months ago.
While 90 per cent of respondents plan to be debt free by the time they retire, 22 per cent say they won’t be. A further 78 per cent said they will be debt free by the time they retire, however, will still struggle to meet their living costs.
More than 75 per cent of respondents believe the government pension is not enough to cover their living costs and a further 40 per cent of retirees do not believe they have enough money to last them through their retirement.
Richard Poole, co-founder of GrownUps, says people are continually seeking new options to fund themselves through their retirement, such as living a more conservative lifestyle or buying smaller properties, which is becoming a crude reality for many, when before it was a choice due to the children leaving home.
‘‘Of particular interest is the majority of respondents stating that they started saving for their retirement between the age of 40 to 45, which is quite early by most people’s standards.
‘‘The recommendation now, however, is that New Zealanders start saving for their retirement earlier during their 20s or as soon as they start full-time employment.
‘‘This is a real challenge for future generations as there are the costs associated with buying first homes, growing families and life experience to contend with – no-one thinks about retirement at 25.’’
The survey found 36 per cent of people had previously invested in a finance company with 40 per cent of the companies invested in having gone into receivership in the last five years.
Of those surveyed, 41 per cent plan to use KiwiSaver as their main source of retirement savings.