Why do some people struggle in retirement?

Harry Fosdick, an American pastor, once encapsulated what financial planners and many of us have always said: ‘‘Don’t simply retire from something, have something to retire to.’’

With that in mind, some of us still have no idea of what life will look like beyond retirement and many of us are too young to even think about it.

The Lotto advert doesn’t really give any pointers in this direction either. You can only practice so long on your golf swing. Even if you are in the small percentage of people who can go professional, what also are you going to do with the money?

A significant proportion of working New Zealanders are not financially prepared for a comfortable retirement or plan for life after work. Believing you are too young to worry about it, is a myth. Think, you work for 40 years, but you may live another 40 years beyond hanging up your hat. You may die early too, but both outcomes are stinky if you don’t have plans to accommodate either.

Ah, a plan. Reminds me of the Cheshire Cat, from Alice in Wonderland. ‘‘Would you tell me please, which way I ought to go from here?’’ asked Alice.

‘‘That depends a good deal on where you want to get to,’’ said the cat.

I guess that is why you start with a plan. Your plan or retirement strategy success will depend on the cumulative effect of the small steps and decisions you make each day. In evaluating your plan, you may need to adjust your lifestyle choices of today to make it realistic.

What age will you retire? Working lives tend to be extending, though not always because we like our jobs. Certainly, lives can be prolonged more so these days, but some (most) of us ‘oldies’ still slow down, don’t want stress and look a little more out of condition.

With a plan devised by an Authorised Financial Adviser, you will have inflation factors and interest/capital return factors built in. You might choose the way of property investment or enhance savings through KiwiSaver or managed funds. It is different strokes for different folks, as to the way to get there, but it all comes back to a plan and making informed choices.

Is insurance Important? Yes, if you wish to protect your retirement strategy. If something goes wrong with your health or ability to earn, you could be stuffed. Insurance may mean the difference between a decent or struggling retirement.

Retirement should be exciting. After all we can be working less and playing more. Money or lack of it could cloud the dream. You may not need a lot. The pension isn’t enough though, if you want to pursue interests and engage in a full and playful retirement. Little things such as the house needs repainting, the car replacing, the rates paid, the local cafe´ supported, a trip or two and just enjoying time with your spouse, family and friends all take up a few bucks here and there.

If you need help with planning your future, you can find a financial planner nearby; visit www.financialadvice.nz which is an independent body listing mortgage, life, and retirement professionals in your area.

Disclosure: Care has been taken to ensure that any information is accurate. No liability is accepted for its use. Enquiries are welcome. Experienced in lending, risk advice and planning, Allistar Walker is a Registered Financial Adviser, Senior Fellow of Financial Services Institute of Australasia and partner in ResRei Financial Facilitators. His full disclosure is available free on request. He can be contacted at allistar@resrei.nz