How much do you need for a retirement with steak dinners and holidays?
According to Massey University, it’s $400,000 in savings by age 65. Massey’s experts say you’ll need $101,000 by age 30 to be on track to achieve that number, which is quite scary for the average 30-year-old – not many have that much money in the bank. However, there are other ways to reach that retirement goal, whether you start before 30 or even after 60. Where could that money come from?
- Your home: do you live in Auckland? Pay off your home loan and you’ll have a mortgage-free home that’s probably worth over $1 million. Downsize to a smaller house in a less expensive area and you could easily have $400,000 left over after the transaction.
- Your rental property: it’s likely to be worth at least $300,000 and probably more. If you’ve managed to pay down debt on it, the sale of the apartment could definitely fund your retirement. Prices grow over time: your $300,000 apartment is likely to be worth $600,000 if you hold onto it for 10 or 15 years. Hold onto it for 20 to 25 years and it could be worth over $1 million.
- Your Kiwisaver: there are excellent benefits to contributing to Kiwisaver, mainly in the form of the $521 annual government bonus. Even if you contribute only the minimum to get that bonus ($1042 per year), compound interest means that could grow to over $188,000 from age 25 to age 65 (not adjusted for inflation). Calculate your own likely Kiwisaver total here.
- Your other investments: a share portfolio, savings or a business investment could all contribute to your income.
The good news is that if you own at least one property, you’re already taking steps to help yourself reach that $400,000 target. Most of us save the bulk of our retirement savings in our forties and fifties, so if you’re already aged 30 or over and you’re nowhere near having $100,000 in savings, there’s no need to panic. Property is one vehicle to help you achieve your retirement goals even if you start investing in your fifties or even your sixties, it’s not too late to make a change. We can help put you in touch with a financial adviser, and we can help you find a property that meets your investment goals. Give us a call today.