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THE COMING GREY TSUNAMI
April 29, 2013 at 12:33 PM
Jeff Matthews wrote an article in the Dominion Post on Saturday April 27, 2013 about the aging “baby boomers” population and what that would mean in NZ Superannuation costs if the annual payment level was continued at around $14,297 per retired person. The figures are mind-boggling as $7.7 billion per annum by 2031 sounds like a huge amount for the Government to pay when they are currently paying close to $1 billion now (which has jumped up in just two years already).
If you review the figures and realise this does not include Health or any other aging costs, you wonder where the Government will get the money from? The most likely answer is, they won’t. Instead at the best case scenario, the Government will increase the retirement age and will not increase the annual payments by the inflation rate just because they cannot afford to do so.
Already many people on the NZ Superannuation are indicating it is not enough to live on and some of the aged population is living in near poverty conditions (according to news blogs). If this is the start of the coming Tsunami, what does it mean for you and me?
Well the first conclusion that I have come to is that there will not be a NZ Superannuation payment or at least not a sufficient payment for me to live off. Therefore if I want to retire and live comfortably when I choose to retire then I had better start planning for it now. The following steps have been a good place to start:
- Complete a budget and start putting some money away into a savings account
- Educate myself about money and investing – through books, courses, seminars, and even games
- Research and study the different investment markets
- Speak to other financially successful people to understand what they did to be successful
- Select the investment markets with which I feel the most comfortable with
- Complete further study about the chosen market to ensure I have a clear understanding
- Take action – start investing
- Maintain a portfolio spreadsheet, review my investment regularly, and continue to grow my portfolio
- Review “do I have enough” to retire on and maintain a standard of living during all my aged years? If everything goes according to plan, the answer is yes!
If this sounds like a durable approach then why not start yourself. Under this website there are several courses you can complete to kick start your financial education and each course recommends further resources so that you can grow your money and hopefully have the retirement lifestyle you want. Go for it.
