If you’re in your fifties or early sixties, you’ve probably already had some thoughts about retirement. What would you like to do? Who would you like to spend it with? Will you have enough money to fund it?
Even if retirement still feels some way out, deciding what you want, particularly when you’ve got time to do something about it, is important. Ensuring you’ll be in good health, establishing or maintaining great relationships, developing interests and building wealth are all things you can action today.
Setting a financial target
For most people, the cornerstone of a good retirement is knowing they’ll have the money to do what they’d like to. Whether that’s going overseas or simply being able to enjoy a good chardonnay with friends over dinner, it’s important to know how much you’ll need.
To see if you’re on track to a retirement lifestyle that’s worth looking forward to, try Mercer’s KiwiSaver Retirement Income Simulator which takes into account not just NZ Super and KiwiSaver but other investments and will help you to identify any future financial shortfalls. Our Mercer Super Trust members your personalised simulator is available once you sign in to your online account.
Even if you’ve already got KiwiSaver or another type of nest egg through your employer, you might be surprised to discover a gap between what you have and your target amount.
Investing for your future
While saving harder might be an option, a smart investment strategy can provide a way to help you grow your money so you reach your goal.
Because any investment – no matter how big or small – involves some risk, it’s essential to understand and be comfortable with the basic principles of investment and to get suitable financial advice when you need it. The Financial Markets Authority, recommends taking three steps when preparing to invest:
Know your investment self
Risk and reward go hand in hand. History shows certain types of investments, like shares, can provide greater gains but are more risky or volatile than others, like term deposits.
If you’ve got a long investment timeframe and you can tolerate risk, then a higher risk investment that might offer higher returns could be right for you. However, if any kind of loss might keep you up at night then it could be wise to choose a different option.
Mercer has developed a short quiz to help you identify your investor preferences which also matches Mercer KiwiSaver scheme, Mercer Super Trust and Mercer FlexiSaver investment funds to different investor profiles.
Deciding on an investment strategy and choosing the best investment vehicles to help you achieve your goals, isn’t simple or easy. While it’s ultimately up to you to understand the basics and what you’re investing in, a financial adviser should be able to provide you with the information you need to make an informed decision. It’s your future, after all.
Call us on 0508 637 237 and we’ll put you in touch with a Mercer adviser.