Will you need an extra source of income for your retirement?
Have you been wondering whether NZ Super and your KiwiSaver will be enough for life after 65?
If so, you’re not alone.
The lockdown touched almost every part of our lives – including our retirement plans. KiwiSaver balances have been on a rollercoaster ride, and your finances may no longer seem as certain as they once did.
In an opinion column in Stuff, Retirement Commissioner Jane Wrightson says COVID-19 has shattered many of the things we thought were safe.
“Pre-retirees have seen their financial planning go awry,” she says.
“One thing this crisis has given us is the opportunity to rebuild our approach to knowledge. We can study the detritus and put our finances back together in a different, better way, because we've all learned something about money, even if it's what we don't have.”
If you’re looking ahead to retirement, how can you use the lessons learned in the pandemic to help you prepare for the future you hope for?
Diversify your investments
Wrightson believes New Zealanders need to get better at diversifying their investments.
Diversification is about ensuring you have a stable investment income by having a range of investments to weather market volatility, rather than having all your eggs in one basket.
You could diversify your investments by finding a third income stream to supplement NZ Super and KiwiSaver. One option is a managed fund.
Managed funds have the potential to generate higher returns than savings accounts or term deposits – especially in the current low-interest environment.
Kiwi Wealth Managed Funds pool investors’ money in different asset types, such as shares, cash, bonds and property. There are three funds – conservative, balanced and growth – so you can choose a fund that best suits your savings goal, timeframes and attitude to risk.
Seek flexible investing
Wrightson says it’s a good idea to stay in KiwiSaver so you can eventually have “the retirement you deserve”.
However, KiwiSaver is still a relatively young initiative, and it may not give you the returns you need by the time you need them.
It’s also important to remember that in most cases you won’t be able to access your KiwiSaver funds till you turn 65. With a Kiwi Wealth Managed Fund, you can access your investment when you need it, without penalties.
You don’t have to be rich to add a third income stream to your retirement investments – with Kiwi Wealth Managed Funds, you can open a new account from $100 and make contributions of as little as $1.
It’s an easy, affordable way to invest. And as with any investment, the key to success is to make regular contributions. Setting aside a sum every month can be a relatively painless way to save for the future.