Retirement Planning & KiwiSaver Scenario | Video
How Live Cashflow Modelling and KiwiSaver Advice Can Transform Your Retirement Planning
When it comes to planning for retirement, it's essential to have a clear picture of your financial future. In this post, we’ll walk through an example of live cashflow modelling, illustrating how we incorporate KiwiSaver and investment advice to help clients make informed decisions for a secure retirement.
Watch the Video for a Closer Look
To see this cashflow modelling in action, watch our video breakdown. We’ll walk you through retirement planning, covering KiwiSaver contributions, projected growth, and investment strategies to maximise retirement savings. Perfect for anyone looking to understand how their choices today can impact their future financial security.
Meet Bruce Wayne and Catwoman
For this example, let's look at a couple – Bruce and Catwoman. Bruce currently earns $250,000 annually, while Catwoman earns $200,000. They’re both contributing to their KiwiSaver accounts, with Bruce putting in 6% and Catwoman 3%. Right now, Bruce has a KiwiSaver balance of $220,000, and Catwoman has $250,000.
The Retirement Scenario
In our scenario, Bruce and Catwoman want their retirement plan to provide for them until age 90 and 92, respectively. They also have $200,000 in a managed fund outside of KiwiSaver, giving them some flexibility if they choose to retire before 65.
To enhance their retirement savings, they plan to contribute an additional $2,000 per month into an investment portfolio outside of KiwiSaver from age 55 to 65. For retirement income, we’ve structured their withdrawals as follows:
$100,000 per year from ages 65 to 75
$70,000 per year from ages 76 to 85
$50,000 per year from ages 86 to 92
They also plan to withdraw $20,000 per year for overseas holidays during the first 10 years of retirement when they’ll be more active.
Projected Outcome
Based on these assumptions, Bruce and Catwoman would likely run out of money by Bruce’s age 89. To address this, we recommended increasing their KiwiSaver contributions from 6% to 10% and investing in a high-growth KiwiSaver portfolio, along with a growth-oriented investment fund outside of KiwiSaver. These adjustments aim to boost their retirement savings, ensuring a more comfortable and lasting retirement.
A Brighter Financial Future
By following this plan, Bruce and Catwoman are projected to reach age 65 with a combined portfolio, including KiwiSaver and other investments, of approximately $2.2 million. If they continue on this path, they’ll also be able to leave a legacy of around $593,000 to the Wayne Foundation, which is an important goal for them.
How We Can Help You
This example highlights the power of tailored financial planning. Along with cashflow modelling, we offer fund recommendations and prepare a detailed KiwiSaver statement of advice. After setting up your plan, we’ll meet with you annually to review and adjust your strategy as your circumstances evolve.
Want to see what we can do for you? Complete our quiz and book a time to speak with us. We look forward to helping you achieve your retirement goals.
Compound Wealth are a KiwiSaver, Retirement and Private Wealth Financial Advice Firm based in Mount Maunganui, Bay of Plenty with clients all over New Zealand.