But how accurate is it ? Do we even want to know ?
The best thing we can do in terms of finances and retirement is to be prudent. We should plan on the assumption we will live somewhat longer than our health and family background might indicate.
What if we live much longer than the average?
GO GO, when we might have the health and energy to get out there and buzz around NZ and overseas. In this stage, we can get through some money, maybe quite a lot.
SLOW GO - where our health slows us down, or maybe we are just getting older and don’t have any great inclination to go far away from home. Spending will usually fall.
NO GO - where we need some care or maybe a lot of care - let’s hope that doesn’t happen to any of us. Spending at this stage can rise, but often can be offset by selling our home, and investing the funds to help pay our rest home fees.
GO-GO is where we spend the dough
Obviously we are likely to spend the most money in the first stage of retirement. This is of course the big conundrum with money and retirement.
How much do we spend at the GO GO stage?
There is no clear answer to this question, but if you work with an adviser for a while he/she will soon get a handle on your outgoing cash / spending, and can usually tell if you are spending your money too quickly or not.
Hard though it may be, reviewing things progressively can work out so much better, without shocks and in an orderly fashion. You can use calculators too such as;
What if your money runs low?
Obviously the best thing to do is plan well ahead so that this is less likely to happen.
Someone recently wrote that it’s not so bad, you can live on government super (just), so all people need do is cut their cloth accordingly and live on their income.
I personally would rather not try that.
Your Single Best Option
Plan ahead and review your plan annually, using professional advice.
Why some people live longer
Various surveys of people aged 90+ have been done, looking for a common thread to their longevity. In one study, researchers discovered that excessive weight, smoking, stress, hard work, etc. do not necessarily kill us.
The main longevity factor was that these people could let things go. They did not hold on to bitterness, anger, resentment, hatred or to past wrongs that people had done to them.
“Resentment is like taking poison and waiting for the other person to die.” ― Malachy McCourt
They did not hold on to the fact that the world is not fair. Fascinating stuff.
“People only grow old when they stop growing spiritually and mentally, and it's possible to change your physical age simply by changing your perception” - Deepak Chopra M.D., F.A.C.P., Hindu Indian-American physician
Deepak is a great writer and orator, mixing western and eastern medicines and philosophies, but some of his views are controversial too.
Having said that, the big drug companies are none too keen on anyone who can find alternatives to their products.
Learn about money management in advance in case you live longer
Annual reviews – as always – are needed
If you have rose coloured glasses, discard them
There are options if your money runs low
Learn about them ahead of time
You can work longer
You can find ways in retirement to generate more cashflow (email us & ask)
You can “eat your house” by moving to a cheaper town
You can build a granny flat in your children’s backyard
You can sell your house to your children
Only use reverse mortgages last resort
This article was supplied by Alan Clarke who is the author of a book entitled “Retire Richer” which is a practical guide for everyone age 25 to 85.
Alan also writes regular articles on www.acfs.co.nz
Alan is an independent authorised financial adviser (AFA) and his disclosure statement is available on request and free of charge.