Retirement myths busted 16 Sep 2015
Retirement can seem a long-way away for many people, especially when we’re busy working hard to provide for our families. But it’s important to give it some thought now, because with retirement will come a whole new set of issues and situations that you might not have been aware of.
On the one hand, if you’ve been smart with your finances you’ll be without a mortgage or dependent children, and you’ll have plenty of time on your hands to do the things you enjoy.
On the other, you could be facing a number of medical and health issues, and you’ll be on a low income.
If you haven’t given your retirement much thought, there’s a high chance you currently subscribe to a few myths about retirement, which we’re about to debunk.
Myth 1: My KiwiSaver will be enough for my retirement.
Many people see KiwiSaver as an easy ticket that’ll be sufficient for a comfortable retirement. The reality is that it really depends on the kind of retirement you’re expecting to enjoy.
If your idea of retirement is sitting around drinking coffee with friends from the comfort of your own home, it’s possible your KiwiSaver will be sufficient. But if you’re planning to travel the world or start an expensive hobby, you’re probably going to need to secure more funds.
Myth 2: I won’t need much money when I retire because I won’t be doing much.
There are many stages to retirement, and they both require some form of income or savings. Early retirement is an active stage, where many people spent their time playing sport, starting new hobbies and travelling the country. All these things cost money.
Further into your retirement it’s likely you’ll become less active, but you’ll need to be investing in new things. You might need to upgrade your vehicle, pay for healthcare and medical bills, or make alterations to your house. You might need to pay for a retirement home, someone to cook you meals, mow your lawns and keep your house clean.
Myth 3: New Zealand has a great public health system, so I won’t need health insurance.
Did you know that the bulk of insurance claims for people over 50 are to cover hip and knee replacements, colonoscopies, cataract extractions and skin lesion? While it’s true that the public health system can cover all these conditions, there are usually long waiting lists before you can be treated. Having health insurance means you can take your conditions to a private healthcare provider, instead of having to wait for treatment.