Monday, 7 January 2013

Retreads in the future (or punctures on the road to retirement)

I was talking to a friend the other day who, like many of us, found 2012 to be one of the less rewarding years of his life. I notice that his was not a unique experience as a significant number of my friends have said something similar. I, myself would have to say that 2012 was one of the least enjoyable years of my life.

Hopefully my misfortunes did not in any way contribute to theirs! I do realise some of these bad experiences have a degree of infectiousness about them.

However from my observations it would appear that most of my friends who were less than thrilled about 2012 reached that stage independently of me.

It would seem that the year just gone might not have been the end of the world but it did bring a lot of nastiness from people in politics, scumbags on the streets, and the 1% for whom any slump in the marketplace was an annoyance rather than a life changing bad event.

My friend whom I started this blog about said he might take retirement this year if certain things didn’t look up for him. He is not a wealthy man who would readily choose such an option without consequences. But he is approaching the qualifying age for Universal Superannuation and feels he doesn’t want to go on struggling along for the rest of his life. He is thinking of choosing to enjoy the rest of his life rather than working himself into the grave.

This is a sentiment I can relate to. While I still have a handful of years before I am old enough to receive Super, I could well make that choice as well when the time comes, despite the fact that unless my fortunes turn around dramatically soon, I will not be ‘set up’ for retirement either.

I think 2013 is the year when we should all consider our retirement, but we need to get a couple of the myths and fairy stories out of the way first.

For many years the very well meaning Diana Crossan, our outgoing Retirement Commissioner has been egging us all on and encouraging us to think about the financial aspects of our impending retirement. This is sound advice and many of the suggestions that came from the Retirement Commission made very good theory. They would have made good sense in practice as well were it not for one thing; an increasingly large number of us need all of our income to cover our living expenses thus leaving no room for savings.

It is the very same Catch-22 that has led to our incredibly high level of personal indebtedness. I have often heard people from the generation prior to mine saying that people are mad to take out home loans as big as they regularly do these days. But what they fail to realise is that most people would never have any chance of owning a house if they had to save up a 30% deposit. They would be long in their grave before they ever got there because house prices have reached levels where even a 20% deposit is equivalent to more than a year’s wages for the average buyer. The only chance many first time buyers are likely to get is if they can wangle a home loan of 90% or more. This puts them in grave danger should they ever lose their job, which is becoming an increasingly common occurrence these days. Thus it doesn’t take a genius to work out that people who can’t afford to save money to get themselves into a house when they are young and healthy are going to be pretty well buggered by the time they reach retirement age, especially if one of the useless governments along the way has dismantled the Universal Super entirely.

But what about Kiwisaver I hear you ask? What about it indeed. Kiwisaver is not like Universal Super at all; it is an investment which means it is subject to all the pressures that any other investment is. Theoretically you could be paying into a Kiwisaver scheme all your working life and get to the end of it and find they have lost your investment. This is not as crazy as it sounds because we have already had the government tinkering with Kiwisaver and they haven’t been paying into it as they agreed to for some time now. Who will follow up and remind them on a regular basis until they make good the deficit?

Mind you I guess you could also find your government has spent your Universal Super as well. Chances are if your Kiwisaver did disappear down a hole (and into the pocket of some sharp money man) there would be nothing you could do about it because it is not a guaranteed income unlike the Universal Super was.

So I think we need to place far less emphasis on the financial aspects of retirement and more on the lifestyle implications. If this sounds simplistic, I am sorry, but some things are more important than money. But that doesn’t mean I don’t want heaps of it. It just means that when it comes right down to it, my peace of mind (or is that piece of mind?) requires that I am generally having a good time and when you don’t have any time to do things that make your heart sing, that is not a good time.

I am fortunate that I have found one thing that I quite enjoy doing and another which I love, albeit that I have discovered these roles extremely late in life. However I am also lucky that I have a whole heap of other things that I want to do when I retire. Actually I’d love to get on with many of them now, but that ugly bastard called reality says that if I try a stunt like that I will be ‘enjoying myself’ without a roof over my head and that would rather take the edge of any potential fun I might have. Thus I will have to keep scoping out those earning opportunities for a while longer yet and put my retirement ambitions to one side.

But mortality is a pretty random thing so I will be making my best efforts to have a good deal of fun in the meantime anyway. The Mayan’s were wrong (or taking the piss) but at the end of the day (not world) we just never know when that final curtain might come down. Make sure you have lots of fun in 2013; I intend to.       

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