Martin Hawes said the amount of money needed for retirement depended on what lifestyle people wanted. Photo: TOM MERTON/CAIA IMAGE/CAIA IMAGE
New Zealand financial writer Martin Hawes has been planning for his own retirement. But he didn't get it all right.
In his new book Retirement Ready he writes about what he should have done, who should manage your money and determining how much you'll need to sustain your lifestyle.
Hawes told Sunday Morning his new book told more of his personal story.
"I left Queenstown about five years ago and moved to Christchurch, had quite a lot of disruption in my life.
"When your life changes you are supposed to have a look at all aspects of your finances and make sure that the settings are still right, and so I did that.
"I really tell the story across insurance, investment obviously, the family trust, my will and so on - so I guess this is quite a different book, it's a wider scope."
Martin Hawes. Photo: Angela Penn
Hawes said a decision facing many moving into retirement in today's world was to work for longer.
"I think the solution for most people is that are going to have to work a couple of days a week."
He said 48 percent of people aged 65 to 69 were working to some extent, which he believed was driven by finance.
Hawes told RNZ some of his top tips to help those planning for retirement:
How much is needed?
Hawes said the amount of money needed for retirement depended on what lifestyle people wanted.
"I think how much you need depends particularly on what you want.
"If the younger people are listening to this they have to work backwards from there. What do you want when you are retired and what is it going to cost to fund that."
He said for the lifestyle he wanted, moving into semi retirement, he would wanted more than $1 million.
Hawes added he also did overseas trips, which was not what everyone wanted.
Retirement is different now
Hawes, who is in his 70s, said retirement today looked nothing like what it did for his parents.
"[Retirement] was much more passive, it began at 60, but their life expectancy was probably more like 75 or something like that.
"Now, you know, I have a whole bunch of friends who I go to Europe to go climbing with, and some of them are still climbing extremely well they are very energetic, they are very fit, they are nothing like what the connotations of the word retirement stand for.
"The word retirement, you know, it's French for withdraw, and these people are not, and I am not withdrawing even though I am semi retired."
Diversify, diversify, diversify
Hawes said he believed people would have less trouble with inflation and getting decent returns on investments if they had a diversified portfolio.
"[A diversified portfolio] will have a reasonable exposure, perhaps 40 percent, maybe even more to equities, and those equities, a big proportion of those shares will be outside of New Zealand.
He said if you looked at what was happening around the world - excluding the last few weeks of disruptions from tariffs imposed by President Donald Trump - there had been some "absolutely fabulous returns in some technology companies".
"For example, Amazon listed on the sharemarket 27 years ago, nearly 30 years ago, and it's returned nearly 33.5 percent per annum on average for each of those years, Apple is similar.
"There have been some absolutely wonderful returns as long as you have other companies and other investments that balance those because they will always be quite volatile."
Financial advice
Hawes said he was a big believer in financial advice for people going into retirement.
He has his own portfolio managed by financial advisors in Christchurch.
"I look at the portfolio every now and again and I am surprised what's it in it and how well it works.
"...they are seeing opportunities that I never saw because I was running around trying to present a seminar or give somebody financial advise or write a book or something.
"These people, that's what they do. They make mistakes but they get things right more often than they are mistaken."
Hawes said the biggest problem was most final advisors were looking for about $500k, which he said was beyond the majority of people.
In his new book Retirement Ready, Hawes covers these points plus many more retirement decisions and looming demands.
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