Retirement

No bang for your buck - Being too conservative with your money carries a lot of risk too

No bang for your buck - Being too conservative with your money carries a lot of risk too

If you are a risk averse investor, retirement at the moment does not come cheap.

With interest rates on savings accounts so low, it takes a lot of money for not much in return. You will need an extremely large deposit if you want to live off the interest from these accounts.

If you […..]

The impact of inflation on annuities

The impact of inflation on annuities

Annuities can seem attractive to many retirees. It is a regular paycheck into your account. It’s an easy way to turn your lump sum savings into a regular fortnightly income.

One of the main annuity providers in New Zealand is Lifetime Income. You invest your money with them and you are guaranteed a certain amount of income every fortnight for the rest of your life. Even if your investments lose money, Lifetime income will still pay you the same flat amount every fortnight. If your investment balance grows, so does your fortnightly income.

Sounds amazing right […..]

There is more than one way to retire

There is more than one way to retire

Up until about 5 years ago, I thought there was only one way to retire. Work for 40 plus years until my mid to late 60’s, until I had enough money to retire with some help for NZ Superannuation.

Since then, I’ve learned a lot about financial independence and how to achieve it. Simple concepts such as compound interest, index fund investing and high savings rates have helped me understand there are other options, one of which is early retirement.

But what if traditional retirement nor early retirement suit you? Are there other ways to approach your retirement and work life?

Why the 4% rule should not be used for YOUR retirement planning

Why the 4% rule should not be used for YOUR retirement planning

The 4% rule is the golden tenet in the FIRE community. It is a calculation that tells you how much you need to retire, based on your annual expenses. Spend $50,000 per year? You would need $1.25 million ($50,000 x 25). You can read more about the 4% rule here and how it comes about.

As a financial adviser I generally dislike […..]

Investing too conservatively may hamper your retirement

Investing too conservatively may hamper your retirement

When many of us retire we are well into our 60’s and tend to be pretty conservative with our investments. And fair enough. We have hopefully built up a significant stash by now, and any large losses could be quite devastating.

Just before we finish work is generally the time of our lives where we have the most money we ever have. So a 30% loss on $500,000 when we no longer have income coming in, has a much more significant impact on us than a 30% loss on $300,000 at age 50 while we are still working.

We have more time to recover and we have the income coming in so we have […..]

Equity glidepaths as a hedge against retirement risk

Equity glidepaths as a hedge against retirement risk

In the last blog we discussed the results of New Zealand based research of the 4% safe withdrawal rate study. In it we highlighted how big an impact a share market crash can have on whether or not we run out of money in retirement.

I won’t be leaving this this to chance. The first ten years of retirement tend to be the most important indicator of whether […..]

The beginners guide to retirement part 12: Stress test your retirement plan

The beginners guide to retirement part 12: Stress test your retirement plan

he best retirements are planned. You know what you want to do in retirement. You know how much it will cost. You know how much you will need saved. Less surprises will mean less stress and a greater likelihood of outliving your money.

The problem is life doesn’t always work as planned. We may […..]