If you’re approaching retirement and worried about the effect of Covid-19 on your investment in the short-term this might help.
In times like this when the sharemarket is unsettled with big ups and downs, generally the best course of action is to stay the course and ride out the storm. History shows what goes up goes down and usually goes back up
But what if you’re approaching retirement and planning to dip into your retirement savings soon? With no clear sense of the end of Covid-19 and its impact on the share market, let alone everyday life, what should you do?
In challenging times like this, it’s always a good idea to plan and only withdraw what you need for the short-term. That said, if you’re worried about your cashflow in the days ahead as you move into retirement, Glen Macann, Kiwi Wealth’s Head of Advice has these things to consider.
1. New Zealand Superannuation will be available in your retirement years. Find out more about payment rates here.
2. Just because the value of your KiwiSaver scheme account has fallen, doesn’t mean you can't draw on it to supplement your retirement income. Our Future You calculator can help you know how much you can spend each week from your KiwiSaver scheme account balance in retirement.
3. If you are worried you won’t have enough to live on in the short term, and working a bit longer is an option, then think about continuing paid work until the current Covid-19 crisis is over. The added certainty around your income might be a good option for you in the short-term.
4. Think about adjusting your goals and reducing your spending in the short-term to help allow for any impact of Covid-19 on your income.
Meanwhile if you’ve already planned on staying in KiwiSaver after you’ve retired as a way to supplement your income, stay the course so you can make the most of the market recovery when it happens. As always everyone has different personal circumstances so if it’s helpful to have a personal chat, email us at firstname.lastname@example.org.