40pc lack funds to re­tire

Kapi-Mana News - - NEWS -

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.

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