How do you prepare for financial independence?
Have you got a retirement plan in place? Would you be relying on the pension, or perhaps making gains through property investment? According to new research, many New Zealanders don't know enough about these basic policies.
With Statistics NZ predicting the retiree population will reach 1.4 million by the year 2051, it seems unlikely that the government will be able to provide pension funds for every retiree into the future. You want to reach a financial position where you don't have to rely on employment, clients or the government for income. However, many New Zealanders do not seem to acknowledge this.
TVNZ reported on October 13 that a Colmar Brunton survey showed that while 85 per cent of people spoken to knew what the pension was, 45 per cent couldn't say the age the pension starts from.
The research was organised on behalf of the Commission for Financial Literacy and Retirement Income (CFLRI), which thinks Kiwis are not addressing their retirement finances until they are just about at that age (65). However, this age is too late.
Retirement Commissioner Diane Maxwell is also quoted by TVNZ as saying that your 20s are the optimal time to start thinking about your retirement – and I agree!
At Goodlife, we like to go a step further than and suggest that instead of making retirement the focus, people should approach their money with a view to achieving financial independence.
This is why the right financial investment planning from an early age is important. The earlier you begin planning for financial independence in your old age, the bigger the rewards will be when the time comes to stop working.
By speaking with an Authorised Financial Adviser, you'll be able to make changes to your financial plan now and be comfortable later, rather than having change forced upon you down the line!
Here's to your financial independence!
Authorised Financial Adviser / Investment Property Expert