Over 50 and broke: Have you left it too late to start saving?
There would be few New Zealanders who have missed the memo that we should be saving for retirement.
KiwiSaver, which just ticked off its 10th anniversary, has got many of us saving for retirement in an organised way for the first time in our lives.
But what if you're nearer retirement, and have not started to think about saving for it, yet?
Financial experts say while it's better to start earlier in life, it is never too late to save for your retirement.
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How much time?
First, the reality. If you start at 50, you will end up with significantly less money than someone who started saving in their 20s.
A 50-year-old woman who joined KiwiSaver now, earning $60,000 a year, could have $67,245 at 65, or enough to give her $62 a week on top of the pension through retirement.
But someone who joined at 25 earning the same amount, would have $280,819 at retirement, or enough for an extra $258 a week, according to Sorted's calculators.
"If you're in your 50s before you start saving for retirement through KiwiSaver, you've already missed out on free money from the Government in the form of member tax credits, which adds up to a considerable amount of lost retirement savings over time, and obviously you have less time to save enough to fund your dream retirement," said Blair Vernon, general manager of AMP in New Zealand.
"It's also possible that you might be compelled to invest in funds that are higher-risk than you would otherwise in an effort to accumulate more savings quickly."
He said, the later people left it to start, the harder it would be to "cross the finish line" on their own terms.
"But the question people need to ask themselves is 'how much savings will I have by the time I want to retire and will it be enough to fund the things I aspire to be doing in retirement?' For most of us the answer is 'no', or at best 'I hope so, but I haven't got round to figuring it out yet'."
What do you need to do?
Vernon said seeing a financial adviser was a good first step for those who were uncertain about the future.
"Access to high-quality financial advice matters – a 'do it yourself' approach doesn't work for everyone and we know that people who use a financial adviser make better financial decisions," he said.
"It is critical more New Zealanders work with an adviser to turn thoughts into action, understand how much they need in retirement and how they can save for it, including making decisions about the KiwiSaver fund or funds they are invested in."
He said, regardless of savers' age or income, a plan was necessary to hit any financial goals.
"We all know this of course – yet, in reality we tend to talk about it a lot, but not actually act on it and, as a result, too few of us are in a position to live the retirement we aspire to."
David Boyle, group manager of investor education at the Commission for Financial Capability, said many people in their 50s might be in a better position to save more than they could have earlier in their lives.
"KiwiSaver is a really good option but it is not the only one."
He said older investors could consider putting money into other investments, such as shares, as well.
"If you don't need that money for a reasonable period of time, equities could give you a better return. I'm in my 50s and I have money in shares. I think of it as a long-term income option as well because they provide a level of dividend and diversification."
Whether to be in a conservative or more growth KiwiSaver fund would depend on investors' circumstances, Boyle said.
"You could live a number of years after you finish work, that could be 25 or 30 years, too conservative an option might limit your ability to protect or grow your funds."
Consider your risk profile - how long do you have until you need the money and how comfortable are you with volatility - not just how much you would like your savings to increase. Taking a growth fund to deliver faster results will not work if you switch out at the first sign of a downturn.
Boyle said while it was never too late to start saving, saving less would limit people's options when they decided to stop work.
But more people now opt to work longer than 65.
Boyle said, if people were working and receiving the pension, they should be able to save at least all of the superannuation they received. "You could save all of that plus your other saving ... bringing that together looks quite attractive."
Every year they worked over 65 was one less that they needed to save for in retirement.
* This is the fourth in a Stuff Business series looking at the problem of debt and financial stress in people over 50.