Superannuation

Everyone wants to retire with enough funds to maintain a comfortable lifestyle. It is probably the biggest investment many of us will make, apart from the purchase of a home.

The Retirement Commission have calculated that a couple in retirement require an after-tax annual income of around $25,000 to cover basic living costs. National Super for a couple is currently $19,623. If you are single and living alone the Superannuation benefit is currently $12,755. Around nine out of every ten women aged 65 years or older received New Zealand Superannuation. Nearly half had no other source of income. In total, 42.7 per cent of all women aged 65 years or older were solely reliant on the government. Clearly National Super will not be enough to provide more than the basics during retirement.

More statistics. The Equal Worth (1999) research conducted in Australia and New Zealand found that overall, women in Australia and New Zealand have mean wealth holdings that amount to only about 85 per cent those of men. In addition we can expect to live nearly 25 per cent longer than men. If we transpose that expectation into requirements at retirement we need 25 per cent more in assets, not two-thirds less.

Consider this: to receive an annual income of $20,000 for a period of 20 years while consuming all capital over that period you would require $250,000.

Whether you are saving to fund your entire retirement or simply saving to supplement income from other sources, the message is the same… the earlier you start, the easier it is.

Contact me to discuss your existing retirement portfolio or to start saving. Please call me to discuss your retirement requirements on 0800 64 MONEY (0800 646 6639) or email sheryl@strategies.co.nz .

Extreme Financial Makeovers

Over the last three years Eugenie Cotter, a 47 year old sales manager has attended three seminars on investing, has read eight personal finance books and has had countless conversations with her husband Harry about what to do with their portfolio. And yet despite her newfound knowledge and concern the couples retirement savings are way out of whack. A full 90% of their money is with just two managers. So much for diversification.

Which brings us to one retirement lesson most of us need to learn and learn again. When it comes to saving for retirement its not so much what you know but rather what you do with what you know.

Retirement planning is an action sport. Your portfolio requires hands on, disciplined, and very regular maintenance to grow as its supposed to.

The problem is that most people are either paralysed by the sheer number of options available or too intimidated by the market to engage. A recent survey indicates that only one in six investors have made a change in their portfolio over the last year. The prevailing phenomenon is inertia. One solution is to have someone else to make the tough decisions for us.

But remember, as any stylist will tell you, no makeover is complete without a little maintenance - diversify and review.

Eugenie & Harry Cotter Age 47 & 49 Retirement 65+
ASSET ALLOCATION
Before	After
67% Bonds	20% Europe
33% Cash	30% Asia
	40% US
	10% Bonds

Carla & Dick Brown Age 44 & 46 Retirement 65+
ASSET ALLOCATION
Before	After
60% Bonds	20% Europe
40% Cash	20% Asia
	13% US
	20% Bonds
	27% NZ Equities

DISCLOSURE STATEMENT

Our Disclosure Statement in accordance with the provisions of the Securities Markets Act 1988 and the Securities Markets (Investment Advisers and Brokers) Regulations 2007 is available free of charge by contacting us on 0800 646 6639, 03 3797035 or emailing tamyra@strategies.co.nz