First of all, check with Work and Income to ensure all available benefits are being received such as accommodation supplements and disability allowances. Check with the local council on eligibility for a rates rebate.

If a large sum of money is needed, the cheapest option to consider is to borrow from family members. This should be done with the assistance of a solicitor to prevent any problems with gift duty or issues that might arise on death.

Unfortunately, children don’t often have money to lend. Borrowing from a bank is a possibility and can usually be done by way of an interest-only loan. While this will help keep repayments small, they still need to made and this can be stressful.

Selling the family home and buying a cheaper house is another way of getting access to funds. This can be an expensive option once all the costs associated with selling, buying and moving are taken into consideration.

Home equity release schemes are proving to be very popular as a last resort option. If you need funds for home improvements, such as a new roof or painting, then taking out a loan will enable you to preserve the value of your house.

Choosing a home equity release scheme is something that needs to be done with caution and is best done with independent financial and legal advice.

Once you become eligible for payments from your fund, you will need to pay tax on those payments as well as bank transfer fees. You will also be exposed to exchange rate changes so that the amount you receive as a pension will fluctuate over time. If you pass away with your money still in a UK scheme, your spouse is likely to receive a pension worth only half of what you would have received, whereas New Zealand retirement schemes pay the whole benefit to your spouse or dependants. UK pension funds are classed as Foreign Investment Funds by Inland Revenue which means that if you are a New Zealand tax resident you may have to pay tax on the investment gains.

UK pensions can be transferred to New Zealand but can only be transferred to a Qualifying Recognised Overseas Pension Scheme (QROPS) without incurring tax. Up to 40% of any money you transfer may go into an unlocked fund and can be withdrawn before retirement age without tax liability if withdrawn more than six years after leaving the UK. By contrast, some UK pensions allow you to take 25% of your funds after the age of 55 without paying tax. Being able to withdraw funds can help with changing circumstances such as marriage, birth of a child or change in employment status.

Having your funds in New Zealand means it is easier to obtain information on how your investment is performing. The transfer is best done with the assistance of a financial adviser to avoid unnecessary penalties and to be aware of your options.

Divide your portfolio into three amounts. The first amount is a lump sum of cash that is the equivalent of 6-12 months worth of income. For example, if you need $1,000 per month to top up your income, set aside $6-12,000 in cash. This amount should be placed in a high interest on-call account.

The second amount of money should be the equivalent of 1-3 years income, so in our example you would set aside $12-$36,000. This should be invested in fixed interest investments which are of good quality.

The third amount to be invested is whatever is remaining after setting aside the first two amounts. These funds should be invested mostly in growth assets with a small amount of fixed interest.

The way this strategy works is that over a three or more year time period the gain from your growth portfolio can be cashed up and put into your income portfolio to keep both portfolios constant. The interest from your income portfolio can be put into your on-call account to keep it topped up, along with proceeds from investment maturities as required.

The word ‘retirement’ has many different definitions these days. For some people, it means setting a specific date for transition from working full time to not working at all. For others, it means reducing work hours gradually over a period of time. Many people are now intending to work well beyond the age of entitlement to NZ Superannuation.

It is increasingly common for people to suffer major setbacks in life which have a financial impact, whether that be redundancy, divorce, health issues, business failure or investment losses. It is also more common for people, especially those in second relationships, to have children later in life. For these reasons, many people can no longer afford to retire at 65.

The improved health and longevity of the over-sixties means that those who retire early face a long period of time – perhaps a third of their life – in retirement. Working longer helps to have a more productive life.

Before you start your retirement savings plan, it pays to think through what your approach to retirement will be. Choosing to stop work before entitlement to NZ Superannuation means you will need to save significantly more than if you choose to stop at or after entitlement. Choosing an active retirement involving travel, health and fitness, sporting and club activities can be more expensive than a less active retirement.

Research shows those who planned their retirement are much happier in retirement than those who didn’t. Set your vision for the kind of retirement you want and start planning it now!

Retirement is seen to be the ultimate but somewhat elusive goal that we all aspire to and for which financial planners chide us that we must be well prepared. In their book Avoid Retirement and Stay Alive (Harper Collins, 2007) David Bogan and Keith Davies put forward the idea that no one should feel compelled to retire and indeed no one should want to retire.

The key message of the book is not that everyone should work hard until the day they die. Rather than retirement being a life changing experience that takes one overnight from being a productive worker to being permanently on holiday, it should be a seamless process where life is a continuous combination of productivity and pleasure, with the balance between the two simply adjusting over time.

There is a common expression that life is journey, not a destination. Too often we are so busy focusing on how much better our lives will be in the future that we forget to enjoy the present. There is no reason why we have to wait until we are no longer working to enjoy travel and leisure activities. Similarly, there is no reason why we have to feel that after a certain age we are useless to
society.

The concept of retirement is a modern one. Early last century, the average person was lucky to survive into their sixties and if they did, they were likely to be ill or frail. Retirement on a pension was intended to allow such people to have a few meagre years of life without having to work while frail. Thanks to improved lifestyles and modern medicine, it is not unrealistic these days to expect to live thirty years in retirement.

Somehow the concept of retirement changed to one of forcing people to give up a productive life on a given date. Continuing to be productive in retirement doesn’t mean however that you have to stay working in a job you don’t enjoy. There are many examples of people who use their later years to work at things they really enjoy or are passionate about. Some even choose this time to set up new businesses.

On the flip side, if you plan to have an active, income-producing retirement, there is no reason why you can’t do now some of the things you were planning to do in retirement. If travelling to Peru or learning to play golf are on your wish list find a way to make them happen today. It’s easy to have excuses. If only I had more time… if only I had more money…. if only I didn’t have children to worry about….

Doing fun things while you are younger and being more active and productive in your later years have been shown to help people live healthier, longer and more meaningful lives. Taking regular breaks is crucial to your physical and emotional well-being and new experiences let your mind know you are still alive. You are in charge, so make your own decisions about how your life will be lived.