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According to a new study on ‘financial consciousness,’ one-third of New Zealanders are losing their confidence over having a comfortable retirement by the time they are 65. The study, involving 3,000 participants throughout the country was to determine how ready, willing, and capable the participants are to take a step that will make them more financially stable.
According to the findings of the study, the level of confidence of potential retirees drop with age, 25-34-year-olds having the highest level of confidence, and the participants above the age of 70 appearing bullish about their golden years. The highest level of concern was recorded in participants between the ages of 45 and 54, with up to 40% of this group revealing their waning confidence in their ability to have a comfortable retirement at 65 compared to how confident they were a year ago.
This group of participants are increasingly pressurised to increase their pension savings with retirement closing by. This is understandable, considering that most of them believe that their savings look considerably low; the cost of a comfortable retirement is set at $545,000 per head. Only 13% of the respondents have confidence in their retirement outcomes coming up to the amount required for a comfortable retirement. About 17% of the respondents are relying on their superannuation account if they lose their job prematurely, or earn no income for over three months.
Several men and women (27% and 33% respectively) do not have superannuation ready for their retirement. All these statistics point to the fact that New Zealanders need to intensify efforts in getting themselves ready for the future. The only way to have a sustainable retirement is to plan and make investments, irrespective of how difficult it is. A good way to start will be the consolidation of your super funds for owners of several accounts. This ensures easy management and reduction in charges.
Furthermore, here are five proven tips that can help in preparing better for retirement by maximising superannuation:
If your super contributions go to various funds, there are chances that you wouldn’t have an accurate of all of them. To keep track of these funds, contact your super provider and ask for a consolidation of all super accounts into one. In addition to cutting down on the fees you spend maintaining these accounts, you also get to keep track of your funds easily.
In addition to the usual 9.5% of your income that your employer pays into your super, you should strive to add more. If you combine your employer and salary-sacrificed contributions (before-tax), you can have about $25,000 as savings. For low-income earners, you can fund your super fund with up to $500 if you contribute up to $1,000 after-tax, in the government-run co-contribution scheme.
A steady transition into retirement is quite important, and you can achieve this by reducing the number of your working days when you are close to retirement. This progressive, rather than instant transition, helps you settle into the world of retirement easily, while adjusting to the lesser workload, and sometimes income. You also get the time to discover new things that you would love to do when you eventually retire. Talking about finances, you also get to save more with a gradual transition.
When you verify your eligibility for the Age Pension in due course, it puts you in the right position to prepare adequately. Note that your eligibility hinges on a couple of factors, including your owned properties or items, relationship status, or income. These can determine if you get a full pension or a part in the end. By knowing your status, you can know what to expect.
There is the Pensioner Concession Health Card that enables you to get cheaper medications and to get all your treatment expenses billed in bulk. Also, you get higher refunds for your medical expenses. This also covers discounts on gas and electricity bills, motor vehicle registrations, property and water rates, as well as expenses on public transport.
These five tips, if put to practice, will ensure that you have the best retirement possible.
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