Blog

Financial Wellbeing in Retirement

Investment

|

5.5.22 |

Joseph Darby

Eight secrets to ensure your golden years are as golden as you deserve

Retirement: the phase of life where you swap business meetings for beach lounging, and alarm clocks for, well, whatever you fancy. But before you trade your briefcase for a beach towel, let's talk about ensuring your finances are as ready for retirement as you are. After all, you want your golden years to be truly golden, not just gold-plated. So, grab a cuppa, settle in, and let's explore eight secrets to help you sail smoothly into a financially secure retirement.

Why bother? A combination of matters – including financial uncertainty, rising costs of living, and the need to fund longer lifespans – means there is an increasing number of concerning headlines about funding retirement or retirement planning. This reflects the financial challenges many face as they transition to retirement. For those of you who’ll retire soon, or have just retired, read on for eight secrets to ensure your golden years are free from financial worry – and can become the best years of your life.

If you’re still some way from retiring, you may be more interested in the five ways to increase your wealth.

1. Consider Downsizing Your Home Sooner Rather Than Later

Big homes are great for big families. But when the kids have grown up and left, all that space and empty rooms can be more of a burden than a blessing.

Even if you’re still living in a big home when you retire, most people will have downsized by the time they reach the later stages of their retirement. This is because of the high expenses, the maintenance burden, and the difficulty of getting around a large property. Downsizing not only frees up wealth that is held in a valuable asset (your own home), but it also increases available cashflow as a raft of expenses are reduced. This typically includes lower council rates, maintenance, power, insurance, among other things. After all, most homeowners would probably jump at the chance to pay less council rates and house insurance, if we could!

Ask yourself: why not enjoy the benefits of downsizing sooner rather than later? This can offer you a range of benefits, including:

Shedding many expenses tied to a large home, which will increase the amount you'll be able to spend on other activities in retirement,
Enabling you to invest any sum you free up from selling your home and buying a more modest property. This investment can provide you more retirement income, so you can enjoy your retirement even more,
It means you can move anywhere you please, such as near family or a lake, and
Freeing up a lot of time you would’ve otherwise spent on cleaning and maintenance if you move to a lower maintenance property.

2. Establish Your Contingency Savings Account

An easily accessible pool of savings will ensure you can weather the storms we’re all sure to face in life.

This could be to meet unexpected expenses such as car or home maintenance, for an excess if you’re claiming on an insurance policy, or to travel at short notice if someone dear to you fell ill.

3. Make a Retirement Budget

If you haven’t retired yet, spend some time analysing your retirement expenses.

Work through a before and after retirement budget, as the estimate of what you spend after retirement will help you understand your income needs. When doing this, take extra care when estimating expenses such as increased travel, hobbies, and healthcare costs, as this is one of the biggest retirement budgeting mistakes people make. Another issue is steadily rising costs because of inflation.

4. Make Your Health a Priority

It doesn’t matter how wealthy you are if you have poor health. This means staying active, eating right, and ensuring you have appropriate health insurance in place. If you decide not to establish health insurance, then ensure you have a plan to self-insure.

With health insurance, if you get in early, your premium level (payments you make for the cover) can be affordable and provide a safety net for later. If you leave it too late, the premiums can become excessive and force you to self-insure.

Related articles:

5. Don’t Worry About the Past

The past can’t be changed.

If finances were tight during the last decade, or you’ve suffered through health issues or other setbacks, you may feel that you haven’t set much aside for retirement. This may lead to anxiety about the lost years. If this is the case, rather than dwelling on the past, focus on what you can do going forward and where you want to be.

If you haven’t talked to your significant other or a trusted friend about retirement, you’re probably missing out on a chance to alleviate your concerns. After speaking about it, you’ll usually be able to more logically think through the next steps.

6. Understand Potential Risks and Take Steps to Plan For Your Estate

If you die without a will, the law says who is entitled to share in the estate. For example, our financial advisers frequently encounter situations such as:

Retired or retiring couples with children who aren’t aware that if one of them dies without a will, the spouse will only receive the personal chattels plus $155,000 (with interest) and a third of anything that’s left. Everything else held in the name of the deceased is divided among the children. If any of the children have passed away, their children receive their share, and so on for each generation.
Individuals, such as widows or widowers without children who aren’t aware that if they die without a will, everything they own will become the property of the Government!

Not only that, but have you considered what will happen if you become injured or mentally incapacitated, such as through illness or an accident? This is what an enduring power of attorney is for.

Spending some time understanding the risks you face, and planning for them, can offer you peace of mind knowing that your loved ones will be taken care of if you’re incapacitated or when you pass away.

A good lawyer will be able to help you in these areas.

7. Learn About the Best Investments for Retirees

Many people carry investments into retirement that were very worthwhile to accumulate wealth (such as residential investment property, which has enjoyed solid results in some New Zealand regions over many years) though might not always be suitable for providing a retirement income and helping people to enjoy the wealth they’ve worked hard to create. Many people we come across also have a motley collection of investments, including multiple KiwiSaver and superannuation scheme investments, which are held without an overall strategy or plan in mind. It can be difficult to track all these investments too, and when they’re held in the names of different spouses that just adds to the complexity!

To resolve this, you’ll need to research the various types of retirement investments available. As each different investment comes with advantages and disadvantages, it’s often best to have different investments complement one another.

Income Diversification Strategies

You might benefit from exploring various avenues to supplement retirement income, such as part-time work, consulting, or monetising hobbies. Diversifying income sources can provide financial stability and keep retirees engaged.

8. Develop a Financial Retirement Plan

Managing investments during retirement can be striking a balance between risk and ensuring a stable income stream. This can be achieved by diversifying portfolios and adjusting asset allocations depending on your aims.

Everyone’s retirement goals vary depending on personal circumstances, lifestyle, and even life expectancy. Regardless of your goals or circumstances, a good plan today can help lay the foundation for improving both your current and future wellbeing. But not everyone knows how all the pieces of their financial life fit together, particularly as things change and you need to rethink your plans.

Ask yourself:

Have you tried an online retirement calculator? This helps you see how long your money will last. You can use different inputs such as a different retirement date, the rate of return, and see how these things may affect your retirement income.
Have you created a retirement plan and agreed on it with your spouse so you have a consistent approach to follow throughout retirement? An investment plan is like a job description. Once you know the job you need your funds to do for you it becomes easier to make the right hire (in this case, select the most appropriate investments).
Have you sought the sounding board of a professional financial adviser, experienced in retirement planning, to review your retirement plan? As a shameless plug for our own services, our financial advisers can do this for a flat rate, and if needed can manage your retirement investments and help with financial planning decisions on an ongoing basis. Getting a second opinion at such a major time of your life is well worth it, and even if you’re not sure, you can still reach out to us for an initial free and no obligation consultation.

Often, we’ll come across people who have saved far too much and are now too late in their retirement to properly enjoy their wealth. Sometimes, retirees take a large portion of their wealth to the grave, and while there are no ‘right and wrong’ answers, it probably would’ve made a lot more sense to have either passed it on to the next generation while they were still alive, spent more (such as on travel or living a more lavish lifestyle), or given more to charities, church, or community. When large sums are taken to the grave, often the lawyers and executors of the will are the most pleased, as they frequently charge significant fees – especially if the will is challenged which can take years to resolve. This is where a detailed retirement plan can ward off such issues.

Bonus Retirement Area: Non-Financial Wellbeing

Financial wellbeing in retirement isn’t just about managing money — it’s also about living well. One often overlooked factor is how retirees spend their time and who they spend it with. Social engagement and lifestyle choices can take on new importance in retirement. Many new retirees find they’ve dedicated a large amount of their lives to their work, and find without the mental stimulation, social connection, and sense of purpose, they’re a little lost.

Staying socially active through volunteering, community groups, or simply staying connected with friends and family contributes significantly to mental and emotional health, reducing the risks of depression. It might also delay cognitive decline.

Lifestyle choices also play a key role. Healthier retirees tend to spend less on medical costs and enjoy a better quality of life. Prioritising exercise, nutrition, and purpose-driven routines — like travel, part-time work, or hobbies — can boost both wellbeing and longevity. These habits not only support physical health but also reinforce a sense of structure and purpose.

Building a lifestyle that encourages connection and meaning can enhance not just personal fulfilment, but also financial resilience — making retirement richer in every sense.

Financial Wellbeing in Your Retirement – The Bottom Line

Taking care of your personal financial wellbeing can be as important to your overall wellbeing as a roof over your head, nurturing your social connections, and maintaining your physical and mental health.

While this might seem a little daunting, a good financial adviser can help you identify the key issues and work out how to effectively address them. Ultimately, getting good advice can help you gain more financial confidence.

While it may not happen overnight, the right approach and partnering with a trusted professional may be the key to managing your financial wellbeing and ensure you can focus on what really matters in life. Reach out to arrange a complimentary, no obligation, initial consultation. It will be our pleasure to assist.