Are you getting close to retirement age?
Would you like to know how to make the transition as smooth as possible?
Our Financial mentors recently worked with a couple in their mid-60s who were considering their retirement options. They came to BSNC to get a WOFF – a Warrant of Financial Fitness. They wanted to know if they should both keep working part-time, or if they could cut back their hours even further. While they currently enjoyed a good lifestyle, they were anxious to find out what they could afford in the future.
They had questions about their Kiwisaver, and when was best time to apply for NZ Government Superannuation. Their underlying concerns were all about what options they had to ensure they could continue to enjoy a good lifestyle well into their retirement without worrying too much about their finances.
Our Financial Mentors started by asking a few questions:
- What were their lifestyle goals for retirement?
- What were their financial goals for retirement?
- What outstanding debts did they have (and when they might be paid off with current repayments)?
- What compromises in regard to luxury item spending could they make to give them more financial security in retirement?
The first step was to prepare a summary of all their debts, including determining the funds available to them through Kiwisaver, and then to look at the value of any items which could be sold to fund their retirement.
The next step was to prepare three different budgets, each a different scenario:
- One of the couple retired but still working part-time.
- Both fully retired, no part-time income.
- Both fully retired, no part-time income, some luxury items pared back, ‘surplus’ items sold to reduce debt and their current repayment commitments.
Both were advised to apply for NZ Superannuation at least four months before their 65th birthdays. NZ Superannuation is not back-dated if you apply after the age of 65.
Regarding their Kiwisaver – they could draw down from one or both of their plans – as it depends on how they would like to personally manage their finances. The pros and cons of each scenario were discussed.
Personal luxuries – what were their individual and joint wants versus needs – where could they compromise?
The couple were very happy with the options presented to them – they then went away to consider everything that was discussed and to make some decisions that will work for them. They were advised they are free to come back to BSNC at any time for more WOFF checks, as there is no limit to the number of times you can meet with a Financial Mentor.
Note that a Financial Mentor will not take control of your money, they will provide you with new tools and knowledge which might improve your situation – what you do is entirely up to you. A Financial Mentor can advocate for you, or provide you support and guidance to advocate for yourself. A Financial Mentor is able to empower you to make better budgeting decisions.
There is no obligation, all our services are free and confidential. Take the first step now and contact our Service Manager, Sharon Grant, on 03 313 3505