Retirement for me (and therefore my other half as well) was always going to be at about 60 years old and I suppose that came from our parents who in their day did retire at 60 as this was the time when they were entitled to Government Super. So, the plan had always been around this age. We, like many others would love to retire earlier, but building our new house did mean we had to take on a mortgage again and does feel like a millstone as we hadn’t had one for a number of years.
Our financial position is good, I am fond of spreadsheets and done a number over the years to see how we are tracking for various projects. I suppose the key thing for retirement is how much will we spend and need to spend once we retire (versus want). The lockdown has really shown us that we don’t need to spend, actually use our preserves and food in the freezer in a thoughtful way, and rummage through the garage for scrap pieces of wood and the many nails that the builders left when they were building our house.
We also had the neighbours skip bin to rummage through as well. They are building a new house in front of us and before the lockdown their builders had completed the retaining wall, kitchen and some other house bits. As a consequence, they had binned numerous off cuts, retaining wall cloth, some broken down pipes, laminated kitchen wood and many other useful items that we gethered. We did our gathering in the early morning as dumpster diving isn’t really our thing, but the things you have to do when Bunnings isn’t open.
The other aspect is to actually finish projects that you start before taking on new ones. Coming out of lockdown we have now completed the new vegie garden and now has soil in it (apparently not a new concept) complete with vegie plants.
So back to the plan, you know the usual concept – earn more, spend less and save the difference. This will allow us to do the things that we have thought about doing once we finish full-time employment, more on that in the next installment. Back to money. I remember Brian Tracey talking about Parkinson’s law (I think it was called that) and more commonly if you earn more, your expenses rise in line with your salary increase. The key thing in his talk was don’t increase spending and save the difference. Seems pretty simple to me.
So currently our net worth is primarily made up of our house and rental property along with some shares, managed funds, KiwiSaver and a couple of retirement savings plans. Retiring at 60 we will have a super scheme from a previous role which isn’t a huge amount, but coupled with other savings we will have a good amount per year to live on. Have allowed for inflation (which I hope I have got right), with other aspects like holidays and renovations factored in on top of this figure.
I found a really good youtube tutorial about a concept called decumulation. I tried to find the link so I could credit the author, but unfortunately I can’t. If I do I will let you know. Have added the link below, start with either the 55 or 60 year tab, them start with the amount in the green cell. See what happens the graph and have a play. Lots of fun and perhaps a tab scarey 😉
Well that is the plan, as rough as it is. We shall see how we go.
Next – what we want retirement to look like for us