Thinking about the future of your finances is something many of us try to avoid. However, spending a little time now considering what you want, setting goals and creating a plan can reap huge rewards.
Ashley Brown, Financial Adviser with the award-winning Milford KiwiSaver Plan shared with Newshub a list of seven important things to factor in as you plan for the future you want.
1. What sort of lifestyle do you want in retirement?
Would you be happy with a 'no frills' lifestyle, or are you looking for absolute freedom and the ability to do what you want, when you want? Perhaps it's something in the middle – a few luxurious treats here and there, but nothing too extravagant.
2. A little more can make a big difference
You'd be amazed at the growth that can occur with a small increase to your KiwiSaver contributions. Could you afford to put in 4 percent or 6 percent, rather than the minimum 3 percent? Perhaps your employer would consider raising their contribution too. Remember – every little bit helps.
3. Think about yourself…and your kids
If you're a parent, it's impossible not to think about your children when pondering your future. So, how do you look after yourself, while also helping them out? Although KiwiSaver should always be a part of your plan, it's definitely worth exploring Investment Funds too. These are investment funds just like your KiwiSaver fund, except you have access to them whenever you need. These can often be started for a small amount of money, and they can be used as education funds, first home deposits for the kids, or simply an alternative way to grow your savings.
4. The sooner you start, the better it will be!
When you're living a busy life, planning your financial future can easily slip down the priority list. But remember, the more time you have, the more your money can grow - that means if you start sooner, you can dream bigger! So, make it a priority. You don't need to come up with a complete strategy straight off the bat – just get the ball rolling by jotting down some thoughts, using this list of key considerations to focus your thinking.
5. Make your money work harder
Don't take a 'set and forget' approach to your investments. We often talk to clients who have been with their default KiwiSaver fund for years, never realising there are a range of KiwiSaver funds with perhaps more appropriate risk and return profiles available to them.
6. Be responsible
The world is an ever-changing place, and a growing understanding of environmental and social concerns is at the forefront. Look for a KiwiSaver or investment provider that invests actively, with strong environmental, social and governance policies; one which focuses on investing in companies who not only deliver a positive return, but also incorporate sustainable business practices.
7. Seek advice – it can help
Research shows that 75 percent* of people believe their overall wellbeing is linked to their financial wellbeing. That means there are a lot of emotions in play when you're planning for your retirement. A fresh set of eyes and ears can really help bring clarity and perspective. You can chat to the Milford team in person, or access some incredibly handy online planning tools. So, what are you waiting for?
This article was created by Milford.
Disclaimer: This is intended to provide general information only. It does not take into account your investment needs or personal circumstances. It is not intended to be viewed as financial advice. Before making any financial decisions, you may wish to seek financial advice. See our Financial Advice Disclosure Statement at milfordasset.com/getting-advice for more information about our financial advice service. The disclosure statements of all Milford Financial Advisers contain more information and are available on request free of charge. Read the relevant Milford Product Disclosure Statement as issued by Milford Funds Ltd at milfordasset.com. Past performance is not a reliable indicator of future performance.
*Source: Money and You – Research – Financial Services Council – August 2020.