Young aim to retire early

ROB STOCK MONEY MATTERS rob.stock@fairfaxmedia.co.nz 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.