Planning for retirement might seem like a task for the distant future, but the truth is, the best time to start planning for retirement was yesterday. And the next best time is right now! Whether you’re in your 20s, 40s, or nearing retirement age, taking proactive steps to financially prepare for retirement will help ensure a comfortable and secure future. Here are 5 practical steps to set yourself up for financial success in your golden years.
1. Get the basics right: start an emergency fund
The foundation of any good retirement plan begins with smart financial habits. Start by setting up an emergency fund to cover unexpected expenses, aiming to save at least three months’ worth of income. If that feels daunting, remember that every little bit counts, so even putting aside just $5 regularly will add up over time.
2. Kick those spending habits: pay down your debt
Next, focus on paying down any debt. Whether you prefer to tackle the smallest debt first (the snowball method) or target the highest-interest debt (the avalanche method), the key is to make a plan and stick to it. Creating a budget will help you identify areas where you can cut back and redirect savings towards your future.
2. Maximise your retirement savings: make every dollar count
Relying solely on New Zealand Superannuation is unlikely to sustain your desired lifestyle in retirement. It’s important to have your own savings too, which is where KiwiSaver comes in. Aim to save at least $1,042.86 per year (just over $20 a week) to qualify for the full government contribution of $521.43. Even if you’re starting later in life, regular contributions to KiwiSaver in your 30s, 40s, or 50s can still lead to significant growth over time.
4. Check Your KiwiSaver settings: align with your goals
One of the simplest - and most effective - steps you can take is to check you’re in the right KiwiSaver fund for your risk profile. Many Kiwis are still in default or conservative funds, which might not be the best option for their long-term goals. A quick chat with your KiwiSaver provider about the right fund for you, could lead to tens or even hundreds of thousands of dollars added to your retirement savings.
5. Talk to a financial adviser: professional guidance for your future
Sometimes, the best thing you can do for your retirement is to get professional advice from a financial adviser who can help you bridge the gap between where you are now and where you want to be.
Take control of retirement planning
Whether you’re just starting out or looking to fine-tune your savings strategy, now is the time to take control of your retirement planning. Contact the team at Mortgage Express to connect with a mortgage adviser and get expert mortgage advice to help you on your path to financial freedom in retirement.
