Retirement Planning.

Retirement planning is not only about age 65.

A good retirement plan considers both the years leading up to retirement and the years that follow.

Before retirement, you may be focused on reducing debt, building investments, supporting family or deciding when and how you would like to finish work.

During retirement, the focus often shifts towards creating income, managing withdrawals, maintaining flexibility and ensuring your money continues to support you over time.

There is no single retirement plan that suits everyone. Your approach should reflect your financial position, goals, timeframes and the lifestyle you want to enjoy.

When to take a closer look at retirement planning.

Retirement planning may be worth considering when:

• You want to understand whether your overall savings and investments may be enough.
• A significant birthday or life milestone has prompted you to think about the future.
• You have sold, or are considering selling, a property, farm or business.
• Your mortgage, family commitments or financial priorities are changing.
• You are considering retiring earlier or gradually moving from full time to part-time work.
• You are approaching retirement and want greater clarity around the decisions ahead.
• You are already retired and want to review your investments, income or spending.

Starting earlier can provide more time and more options, but reviewing your position can be valuable at any stage.

KiwiSaver is only one part of retirement planning.

KiwiSaver encourages regular saving and provides access to a range of investment options. Depending on your circumstances, it may also include employer and government contributions.

However, KiwiSaver may not provide all the flexibility you need before or during retirement.

Savings and investments held outside KiwiSaver may help you:

• Create income before KiwiSaver becomes available.
• Reduce your working hours before fully retiring.
• Pay down debt.
• Meet unexpected expenses.
• Support children or grandchildren.
• Retain access to part of your money.
• Build wealth for medium term and long-term goals.

A broader retirement plan helps you understand how KiwiSaver fits alongside your other assets rather than treating it as your entire retirement strategy.

Planning for the years before retirement.

The years leading up to retirement can be an important time for strengthening your financial position.

Your priorities may include:

• Paying off your mortgage.
• Building investments outside KiwiSaver.
• Creating an emergency or cash reserve.
• Helping family.
• Preparing to move into part-time work.
• Establishing an investment income stream.
• Selling or restructuring a property, farm or business interest.

Planning ahead gives you more time to consider these decisions carefully and understand how one choice may affect another.

Creating income throughout retirement.

Building retirement savings is only one part of the process. You also need to consider how those savings may provide income once you reduce or stop working.

Your retirement income may come from several sources, including:

• New Zealand Superannuation.
• KiwiSaver withdrawals.
• Investment income.
• Cash and term deposits.
• Rental or property income.
• Business interests.
• Part time or consulting work.

These sources may become available at different times and may not remain the same throughout retirement.

A retirement income plan can help you consider how much you may need, where the income could come from and how your withdrawals may affect the amount you have available later.

Investing through retirement.

Retirement does not necessarily mean that all your money should stop being invested.

Some money may be needed soon and should remain accessible. Other money may not be required for many years and may need to remain invested to provide income, support future spending and help manage the effects of inflation.

Your investment approach should consider:

• When you expect to need your money.
• How much income you may need.
• Your comfort with changes in investment values.
• The effect of inflation over time.
• Your need for access and flexibility.
• The amount you would like to retain for future expenses or family.

Separating money according to different goals and timeframes can help balance immediate access, regular income and longer-term growth.

Keeping your retirement plan flexible.

Retirement may last for several decades, and your circumstances are likely to change during that time.

You may retire earlier or later than expected. Your spending may change. Investment markets will rise and fall. Family, health and lifestyle priorities may also evolve.

A flexible retirement plan can help you respond to these changes while keeping your longer-term goals in view.

Your plan should be reviewed regularly so that your investments, income and spending continue to reflect your circumstances.

Considering family and legacy.

Retirement planning can also include what you would like your money to achieve beyond supporting your own lifestyle.

For some people, the priority is to enjoy what they have worked hard to build. Others may want to preserve part of their wealth for a partner, children, grandchildren or a cause that matters to them.

Thinking about these priorities can help you decide how much you may be comfortable spending, how your investments should be structured and what you would like to retain.

Your retirement plan should also work alongside appropriate legal and estate planning advice.

Bringing your retirement plan together.

Retirement planning often involves decisions that cannot be answered by one calculation or considered in isolation.

A financial adviser can help you:

• Review your current financial position.
• Clarify the lifestyle you want in retirement.
• Consider different retirement dates and scenarios.
• Review your savings, investments and KiwiSaver.
• Explore how your investments may provide income.
• Understand the trade offs involved in different decisions.
• Develop a plan that can be reviewed as your circumstances change.

At Yovich & Co, we take the time to understand what matters to you. We can help you bring your investments, future income, timeframes and lifestyle goals together into a retirement plan that reflects your circumstances and priorities.