Young aim to re­tire early

Upper Hutt Leader - - FRONT PAGE -

ROB STOCK MONEY MAT­TERS rob.stock@fair­fax­me­ How long do you want to con­tinue work­ing? Iron­i­cally, the older you are, the more likely you are to say you want to graft on past the age of 65.

And the younger you are, the more likely you are to want to hang up your work boots, suit, or stetho­scope long be­fore then.

When BNZ sur­veyed the pop­u­lace on their de­sired re­tire­ment age, it found 22 per cent of 18 to 24 year-olds want to have re­tired by the time they are 60, and 31 per cent would like to have shrugged off work’s yolk by 65.

This is de­spite the pre­vail­ing wis­dom be­ing that NZ Su­per pay­ments will have to start at 67, or 68, not the cur­rent 65, in or­der to keep it sus­tain­able in the face of an ageing pop­u­la­tion.

Amere 36 per cent of those young­sters (ex­clud­ing the ‘‘don’t knows’’) ‘‘wanted’’ to work past aged 65.

Now, as the su­per-fru­gal, or su­per­suc­cess­ful will tell you, re­tir­ing early is an en­tirely achiev­able goal for in­di­vid­u­als, though not for an en­tire fifth of the pop­u­la­tion.

To re­tire, you need a sus­tain­able pas­sive in­come high enough to sus­tain your life­style. The higher your life­style ex­pec­ta­tions, the more you’d need.

Online wealth cal­cu­la­tors pro­vided by the likes of AMP, ANZ and Ki­wiBank will help you work out a tar­get wealth.

Some aim to do it through property in­vest­ment, some through a high-earn­ing ca­reer, some through busi­ness, some through su­per-fru­gal­ity.

Early re­tire­ment is an en­tirely rea­son­able aim in life, and the young and Build your ca­reer Be­come an ac­tive saver Be an in­vestor op­ti­mistic, with decades of work stretch­ing ahead of them, are free to aim for it.

But cu­ri­ously, the BNZ found that as the years roll by, the pro­por­tion of peo­ple who ‘‘want’’ to work past the age of 65 rises.

By the time folk are be­tween 55-64, more than half of peo­ple (52 per cent) want to be work­ing past 65. A good chunk hope to still be at the wheel af­ter 70.

Many older peo­ple want to use their skills, stay ac­tive, and en­gaged through work.

But I sus­pect the ‘‘want’’ at this stage par­tially trans­lates to ‘‘need’’.

We all ‘‘want’’ money to live de­cently, so want­ing to carry on work­ing be­cause we want a com­fort­able life.

As we get older, the num­ber of pay pack­ets we have left de­creases, and our sense of our own em­ploy­ment fragility (first to be made re­dun­dant, last to be re­hired) in­creases.

Plus, the value of your sav­ings at age 65 can be pre­dicted with greater ac­cu­racy. Sud­denly every dol­lar looks pre­cious, and worth earn­ing.

Press­ing the ‘‘work past 65’’ but­ton can be a re­lief too, if we haven’t salted away enough. Ad­vice to those young. If you want the op­tion to stop work be­fore 60, or even 65, you need to go hard early on ca­reer, house and wealth.

These days be­ing a prac­ticed saver and in­vestor, and be­ing sen­si­ble with the use of debt, are es­sen­tial life skills.

Those who want the op­tion of an early re­tire­ment ig­nore them at their peril.

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